Three-Party Model

The Three-Party Model in payments, also known as a closed-loop system, is a card scheme structure where a single entity acts as both the card issuer (issuing bank) and the merchant acquirer (acquiring bank), facilitating transactions directly between the cardholder and the merchant. This streamlined model contrasts with the more common Four-Party Model by eliminating the need for a separate card network intermediary, thereby controlling the entire payment flow from end-to-end.