With them it is possible to own gifts of your choice with just a simple swipe.  Even better, unlike rusty old Arabian lamps, they are flat and fit neatly into the lining of your wallet.  But, aside from the relatively simple use of credit cards, a lot of people are aware of how credit card processing really works.

No, it doesn't involve a genie.
Not really.

Credit Cards Are Issued By Financial Institutions

No surprises there.  All monies in the end ultimately begin and end in these institutions.  What these financial institutions (banks, basically) do is they act as guarantees for you.  The money you use with your credit cards is backed by the banks.  People who eventually own credit cards (like you) are referred to in credit card lingo as the Card Holder.

Credit Cards Are Managed By Credit Card Associations

Common examples of these are Master Card, American Express, and Visa.  These companies determine the transaction rules between issuing houses (the financial institution), the card holder (you) and the Merchant.

Which Brings Us To The Definition Of Merchants

Consider the familiar situation where you work into a Mall. Whilst window shopping, you step into a clothe store and accidentally stumble on a pair of Jeans that you like-oh my God-totally have to buy.  After deciding that the pair of jeans is indeed your size you then proceed to the counter to pay for the purchase with your credit card. Well, once your purchase is confirmed the Merchant in this situation is the cloth store. Simple put, when credit companies refer to the Merchant, they are talking about the person who is benefiting from your credit card. The store from which you are buying the awesome pair of Jeans, The restaurant where you had that incredible meal-All these people who provided services for which you paid for with your credit card are referred to as Merchants.

There Is One Final Member Involved In Credit Card Processing. This Is The Financial Institutions Of Merchants

 Once you are done paying for the pair of jeans, the store does not simply pick up the phone and make a demand for money.  Instead, it hands the details of the just concluded transaction to what is known as, an acquirer who in turn approaches the issuing bank of the credit card and initiates the disbursement and allocation of funds.  Acquirers also are used in the validation of your credit card transaction.  When the store clerk turns to you and shakes his head mutely, before informing you that you have no credit - that bit of information has just been handed over to him by the acquirer.

Acquirers are basically the middlemen between merchants and your Card issuers.

So There

Those are the major parties involved in a single credit card transaction.  Of course, some of these steps occur with charged rates.  How much will be charged can easily be discovered when you fill out the credit card applications.

Yes, it's a bit of a let-down that Genies are not involved in Credit card transactions.  But, these days, if you want a genie bad enough, it's probably possible to simply buy one, given the right Merchant.