Pathward Financial Investor Presentation Deck
Definitions
Industry Terms
Banking-as-a-Service (BaaS):
Providing financial services and solutions to third parties
to offer through their distribution channels.
Push-to-debit:
The ability to move money directly to an end user. At
Pathward, our push-to-debit capabilities are called
"Faster Payments".
Types of Payment Cards
Debit Card:
A type of payment card typically tied to funds held in
a deposit account.
Credit Card:
A type of payment card typically attached to a line of credit
that a user can make purchases against.
Prepaid Card:
A type of payment card that holds a finite amount of funds
and is not directly tied to a bank account or line of credit.
Virtual Card:
A digital counterpart to a payment card, generated with
a unique card number to settle a particular transaction by
an authorized user. These are often used for one-time,
business-to-business payments.
22
Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation
Payment Players
Acquiring Bank:
An acquiring bank provides merchant accounts that allow a
business to accept card payments and works in conjunction with
the acquirer processor. In some cases, the acquiring bank and
acquirer processor are a single entity.
Acquiring Processors:
Acquiring processors connect directly with merchants, the network
and the acquiring bank, or via a payment gateway, to facilitate
payment acceptance at the merchant. They provide the technical
capabilities to create the system of record to communicate with
authorization and settlement entities. In some cases, the acquiring
bank and acquirer processor are a single entity.
Issuing Bank:
The issuing bank enters a relationship with the cardholder,
program manager, and enables cards on a given network. The
issuing bank fills three primary roles in payment processing: it is a
"network sponsor," which means it can issue cards on a given
payments network; it is a holder of funds (for example, for gift
cards, deposit accounts and other non-credit cards); and it is a
"settlement point," managing a consumer's account and paying
out to the merchant's account after a purchase.
Issuing Processor:
Connects directly with the networks and issuing bank to
provide the system of record, authorize transactions and
communicate with settlement entities.
Fintech:
Fintech refers to the integration of technology into offerings
by financial services companies in order to improve use and
delivery to consumers.
Merchant:
A merchant simply refers to any business that accepts
card-based payments either via a physical swipe (at the
point-of-sale) or virtually online.
Program Manager:
Businesses that manage various elements of a card
program on behalf of the issuing bank. The Program
Manager is responsible for defining the program,
operating the program, and managing its profitability. The
program manager typically is responsible for
establishing relationships with processors, banks,
payment networks, and distributors and for establishing
account(s) at banks.
pathwardView entire presentation