As the name suggests, an issuing bank is a bank issuing credit cards or debit cards to their customer. They are also known as credit card issuers. Whenever a transaction is initiated from the merchant, the issuing bank is at one end of the payment. For instance, if you initiated a transaction by purchasing an item from a retailer, the said transaction will travel from the merchant through an acquiring bank via the account number you used for making the payment and finally on to the credit card issuers, which is ultimately responsible for authorizing that transaction. Once the transaction is sanctioned, the funds will be moved from issuing bank to the acquiring bank; this process is called a settlement.