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1The tap and the request
No money moves in this step.
A cardholder taps to pay $10. The terminal reads the card and sends an authorization request to the merchant's acquirer. The acquirer passes it to the card scheme, which routes it to the issuer, the bank that holds the cardholder's account or credit line. The scheme sets the rules and carries the messages. Issuers and acquirers are its members.
Singapore example NETS is equally owned by Singapore's three largest banks. It operates the domestic card scheme, which MAS lists as a designated payment system, so a Singapore terminal may route to NETS as well as to Visa or Mastercard.
Visa lists 21 acquirers in Singapore, among them DBS, OCBC, UOB, NETS, Adyen, Stripe and Airwallex.
SourceIndustry practice, consistent with the Berlin Group description of ISO 8583 authorization. Berlin Group, ISO 8583 authorisation and clearing , NETS Group, ownership , MAS, FAQs on the Payment Services Act (4 Oct 2019), questions 4 and 6 , Visa Singapore, list of acquirers
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2The issuer answers
No money moves in this step.
The issuer checks the balance or credit line and the fraud signals, then approves or declines. An approval places a hold. It does not move money. The answer returns along the same route to the merchant. In Singapore, DBS says a NETS payment with an ATM card is deducted from the linked account in real time.
SourceBerlin Group, authorization as a real-time question separate from clearing. Berlin Group, ISO 8583 authorisation and clearing , DBS, understanding payment cards, debit and credit
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3Sales are batched and cleared
No money moves in this step.
The merchant batches the day's approved sales and sends them to the acquirer. The acquirer submits clearing records to the scheme, which passes them to each issuer. Clearing carries data about each transaction. Still no money moves.
SourceBerlin Group lists presentments, chargebacks, fee collection and reconciliation as clearing items. Berlin Group, ISO 8583 authorisation and clearing
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4Net money settles between the banks
Money moves in this step.
The scheme works out what each issuer owes and what each acquirer is owed. The net amounts move between issuer and acquirer through settlement banks, in fiat and mainly on banking days. Each party keeps its cut along the way.
Singapore example On a $10 payment, fees run from $0.08 on NETS at 0.8% on debit to $0.84 on Stripe at 3.4% plus S$0.50 on domestic cards. The fixed S$0.50 is taken at face value against the $10. UOB's pricing table lists NETS at 0.8% on debit and up to 3.5% once credit card acceptance is added, so part of the range is card type. The split between interchange, scheme fees and the acquirer's margin is not published for Singapore. Which bank settles Singapore dollars for Visa and Mastercard is not established.
SourceIndustry practice. Not verified against a scheme document. The order of the cuts is typical and no market split is quoted. UOB, NETS merchant solutions and pricing , Stripe Singapore, pricing
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5The merchant is paid
Money moves in this step.
The acquirer pays the merchant the $10 minus fees. The issuer posts the purchase to the cardholder's account, turning the hold into a charge. The fees cover interchange paid to the issuer, scheme fees and the acquirer's margin.
Singapore example Interchange is set by the card schemes and sits inside the merchant discount rate. In 2019 MAS said it had studied other countries' interchange rules and would step in only where the benefit to consumers is clear, and in 2021 it saw no need to mandate disclosure of the rate. Payout timing depends on the plan. One NETS plan lists next-day to three-day settlement, and Stripe's initial payout in Singapore takes 7 calendar days. Plan terms as published on 13 October 2026.
After those fees the merchant keeps $9.92 at the low end and $9.16 at the high end.
SourceIndustry practice. MAS, reply to parliamentary question on disclosure of interchange fees (2021) , MAS, FAQs on the Payment Services Act (4 Oct 2019), questions 4 and 6 , UOB, NETS merchant solutions and pricing , Stripe documentation, payout timing by country