Maya Chen pays Demo Coffee Ltd by card. The request travels terminal to acquirer to network to issuer and back in seconds — through Cardnet, a fictional card network standing in for Visa/Mastercard-style networks. (SYNTHETIC / TRAINING ONLY)
Maya taps her card for a EUR 42.50 catering order. The terminal reads the chip or contactless data defined by EMV (the chip-card standard maintained by EMVCo) — including a one-time cryptogram that proves a real card was present.
The terminal builds and sends the authorisation requestDemo Coffee Ltd (merchant terminal) → Meridian Bank (acquirer) · 0100 authorisation request (ISO 8583)
03Message
Meridian Bank forwards the request to CardnetMeridian Bank (acquirer) → Cardnet (card network) · 0100 authorisation request (ISO 8583)
04Message
Cardnet routes the request to Bank AlfaCardnet (card network) → Bank Alfa (issuer) · 0100 authorisation request (ISO 8583)
05Processing
Bank Alfa checks the card, the funds and the riskBank Alfa (issuer)
06Message
Bank Alfa approves and respondsBank Alfa (issuer) → Cardnet (card network) · 0110 authorisation response
07Message
Cardnet relays the approval to Meridian BankCardnet (card network) → Meridian Bank (acquirer) · 0110 authorisation response
08Message
The terminal shows approvedMeridian Bank (acquirer) → Demo Coffee Ltd (merchant terminal) · 0110 authorisation response
09Posting
Bank Alfa places an authorisation holdBank Alfa (issuer)
Maya taps her card for a EUR 42.50 catering order. The terminal reads the chip or contactless data defined by EMV (the chip-card standard maintained by EMVCo) — including a one-time cryptogram that proves a real card was present.
02Message
The terminal builds and sends the authorisation requestDemo Coffee Ltd (merchant terminal) → Meridian Bank (acquirer) · 0100 authorisation request (ISO 8583)
The terminal packs the card data, amount and merchant details into an authorization request — a 0100 message in ISO 8583, the card industry's messaging standard — and sends it to Meridian Bank, the acquirer that serves Demo Coffee.
03Message
Meridian Bank forwards the request to CardnetMeridian Bank (acquirer) → Cardnet (card network) · 0100 authorisation request (ISO 8583)
The acquirer checks the merchant is one of its own and the message is well formed, then forwards the request into the card network. The acquirer cannot approve — only the card's issuer can say yes.
04Message
Cardnet routes the request to Bank AlfaCardnet (card network) → Bank Alfa (issuer) · 0100 authorisation request (ISO 8583)
The network reads the bank identification number (BIN) — the opening digits of the card number — recognises Bank Alfa as the issuer, and delivers the request to it.
05Processing
Bank Alfa checks the card, the funds and the riskBank Alfa (issuer)
The issuer decides in well under a second: is the card open, does the EMV cryptogram verify, do funds cover the amount, and does the fraud engine trust this purchase? Approve or decline — the whole flow exists for this moment.
06Message
Bank Alfa approves and respondsBank Alfa (issuer) → Cardnet (card network) · 0110 authorisation response
The issuer answers with a 0110 response carrying an approval and an authorisation code — a short reference that will later tie the clearing record back to this exact approval.
07Message
Cardnet relays the approval to Meridian BankCardnet (card network) → Meridian Bank (acquirer) · 0110 authorisation response
The network sends the response back along the same path it came. Request out, response back — one conversation, a few seconds end to end.
08Message
The terminal shows approvedMeridian Bank (acquirer) → Demo Coffee Ltd (merchant terminal) · 0110 authorisation response
Meridian Bank passes the approval to the terminal. Maya sees 'approved'; Demo Coffee stores the authorisation code with the sale for tonight's clearing batch.
09Posting
Bank Alfa places an authorisation holdBank Alfa (issuer)
The issuer reserves EUR 42.50 against Maya's available balance so she cannot spend it twice. This hold is not a movement of money — nothing has been debited and nothing has moved between the banks. The real debit comes at clearing and settlement.
An approval is a promise, not a payment. No money has moved yet — the debit, the interbank movement and the merchant's payout all happen later, in clearing and settlement.
RESERVE Maya Chen's card account at Bank Alfa — EUR 42.50
What this simplifies: A dual-message model: authorise now, clear later. Real acquiring often adds a gateway or payment facilitator in front of the acquirer, 3-D Secure before the request, and network timings and stand-in limits that network rules generally set per scheme. Cardnet is fictional; the amount is illustrative.
Standard definitions for payment, clearing, and settlement terminology used across BIS committee reports and referenced by glossary entries on this site. · Checked 2026-07-12
Terminology has evolved since this edition; newer CPMI publications refine some definitions.
Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal
This site's own simplified teaching models. · Checked 2026-07-12
What this simplifies: One terminal, one acquirer, one issuer, dual-message processing. Gateways, payment facilitators, 3-D Secure and single-message systems are omitted; Cardnet is a fictional network and all amounts are illustrative.
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.
COMMUNITY SIGNAL
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