Who Does What in the Payments Industry?
Every payment, whether a card purchase or a debit order collection, passes through several organisations that each play a defined role. Understanding who does what makes it much easier to follow where a payment is, who to contact when something fails, and why certain rules apply to your business.
This page summarises each role and how they fit together. For a fuller walkthrough, see payment participants, or return to the Reference hub.
The roles
Issuer
The issuer is the bank or institution that gave the payer their card or holds their bank account. In a card payment the issuer decides whether to approve the transaction; in a debit order the payer's bank decides whether the collection is paid or returned unpaid. The issuer is the payer's point of contact for disputes and stop payments.
Acquirer
The acquirer is the bank or licensed institution that enables a merchant to accept card payments. It receives transactions from the merchant, routes them to the schemes for authorisation, and settles the proceeds to the merchant. The acquirer also carries the risk of the merchant's chargebacks, which is why it vets merchants before onboarding them.
Sponsoring bank
Non-bank participants cannot submit entries into the clearing system directly. A sponsoring bank sponsors them in, submits their payment instructions under its own participation, and takes responsibility for those entries. Debit order collectors, TPPPs and system operators all operate under bank sponsorship.
Payment service provider (PSP) and third party payment provider (TPPP)
A PSP provides payment services to businesses: collecting debit orders, accepting cards, sending payouts and supplying the technology around them. When a provider receives money on behalf of other businesses across its own bank account before paying it over, it acts as a TPPP, a role subject to registration and sponsorship requirements. Kwik operates in this space, giving businesses access to collection and payment rails without each business needing its own bank sponsorship.
System operator
A system operator provides the technical processing of payment instructions on behalf of other parties, for example preparing and delivering debit order files to a sponsoring bank, without itself handling the funds. Many providers are both a system operator (moving the data) and a TPPP (moving the money).
Gateway
A gateway is the technology layer that captures payment details securely from a website, app or device and passes the transaction to the acquirer or processor. It handles encryption, 3-D Secure and formatting, but does not itself approve payments or hold funds. See gateway, processor, switch and acquirer.
Switch
A switch routes transactions between parties, for example carrying a card transaction from a POS device or ATM network to the correct issuer for authorisation. Switching is invisible to merchants and payers but essential to interoperability.
Clearing house
The clearing house exchanges payment instructions between banks and calculates what each bank owes the others. In South Africa this is BankservAfrica, which operates the clearing infrastructure for EFT, debit orders, DebiCheck, real-time clearing and PayShap.
Card schemes
Visa, Mastercard and other schemes set the rules, standards and interchange framework for card payments, and operate the networks that connect issuers and acquirers globally.
Regulator
The South African Reserve Bank (SARB), through its National Payment System Department, oversees the whole system: who may participate, how settlement works and what standards apply. Interbank obligations ultimately settle across accounts held at the SARB.
How they interact
Take a monthly DebiCheck collection as an example. Your business agrees a mandate with a customer. Kwik, acting as PSP/system operator, sends the mandate request through its sponsoring bank into the DebiCheck system, where BankservAfrica routes it to the customer's bank (the issuer side) for the customer to authenticate. On the action date, the collection instruction follows the same path; the customer's bank pays or returns it; BankservAfrica clears the results; and the banks settle with each other through the SARB's settlement system. Each organisation touches the payment, but each is responsible for a distinct step.
For card payments the chain is similar: merchant to gateway, gateway to acquirer, acquirer to scheme, scheme to issuer, and settlement flowing back along the same path.
Related reading
Reason Code Directory
A directory of common bank reason and response codes for debit order unpaids, DebiCheck declines, card declines and returned bank transfers.
Regulators and Organisations
The organisations that govern South African payments, including the SARB, PASA, BankservAfrica, the Payments Ombud and international card schemes.