What is Visa?

VISA is the short form for Visa International Service Association. It is a multinational company based in San Francisco, California, USA. It facilitates electronic payments all over the globe. The company markets and manages payments between various financial institutions, merchants, consumers, businesses and government entities. The Visa network is spread over 200 countries connecting many consumers, businesses, banks and governments.

The Visa cards can be used anywhere right from the world’s major cities to remote areas without access to banks. They can be used to make payments online, send money to friends and family and for accessing basic financial services. Governments are increasingly using Visa cards over cheques as using these cards are very economical and efficient.

VISA Services

Visa offers the following types of cards and services to its members:

Debit cards – A debit card allows the customer to access his fund immediately. For this he has to pay from a checking or a savings account.

Credit Cards - A credit card may be used repeatedly to borrow money or buy products and services on credit. For this the customer has to make monthly payments with interest.

Prepaid Cards- It is quite similar to a debit card. The user has to pay from a cash account which does not have check writing privilege.

Visa operates the PLUS automated teller machine network and the Interlink EFTPOS point-of-sale network, which facilitate the "debit" protocol used with debit cards and prepaid cards.

VISA Working

A Visa transaction is very safe, reliable and convenient. This is because it is backed by a very supportive infrastructure.

A typical Visa transaction has four parties

1. The merchant could be any entity like a store, restaurant, online retailer, hotel or airline which accepts Visa as payment.
2. The acquirer could be any financial establishment which enlists merchants to accept Visa payments and ensures they get paid for each transaction.
3. The issuer is a financial institution which provides Visa-branded cards or other Visa-branded payment products to consumers and businesses. When a Visa-branded credit card is used, the issuer “lends” the consumer the funds to complete the transaction. If it is a debit or prepaid card transaction, the funds are automatically withdrawn from the account and transferred to the acquirer.
4. The account holder is any customer or business which uses a Visa card or other Visa branded payment product to make purchases.

Let’s understand the working of a transaction by taking an example.

Say a Visa account holder makes a purchase with his card. Here it is the acquirer (which is the merchant’s bank) which actually reimburses the merchant for the purchase. After this the issuer (the account holder’s bank) reimburses the acquirer within 24 to 48 hours. The last step is the issuer collecting money from the account holder. If a debit card is used then the money is directly collected from the account holder’s account. Incase a credit card is used; a bill is issued for the same.

Visa transactions take place all over the world. It is a very convenient method for paying and also to get paid. The transactions are safe and efficient and It has made our lives easier.