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How GSA SmartPay® Works

Through the Master Contract, the GSA SmartPay program provides payment solutions to support mission needs.

Agencies/organizations issue a task order under the GSA SmartPay 3 Master Contract to one of the GSA SmartPay contractor banks, Citibank or U.S. Bank. Then, the awarded bank provides payment solutions to the agency.

GSA SmartPay transactions involve the card/account holder, chosen payment solution, acquiring bank, issuing bank, brand network, and merchant.

How a GSA SmartPay Transaction Works

  1. Payment Transactions

    A card/account holder uses a GSA SmartPay solution as a method of procurement and payment for the authorized purchase of goods/services.

  2. Approval and Funds Request

    The acquiring bank receives authorization from the issuing bank through the brand network (Visa/Mastercard).

    The merchant finalizes the transaction and the acquiring bank requests payment from the issuing bank through the brand network.

  3. Funds Interchange

    Once approved, the issuing bank provides funds to the acquiring bank through the brand network. The brand assesses an interchange fee on the approved amount.

  4. Merchant Payment & Card/Account Holder Billing

    The acquiring bank assesses a processing fee on the approved funds and the merchant receives payment.

    The issuing bank bills the card/account holder for the full amount of the goods/services purchased.


Card/Account Holder

An individual issued a card/account at the request of an agency/organization.


The entity accepting payment from an agency/organization in exchange for goods/services. The merchant may be a required source inside or outside the federal government, another government agency or a private sector merchant of supplies or services.

Acquiring Bank

A financial institution that processes GSA SmartPay card/account payments on behalf of a merchant. It allows merchants to accept payments from the issuing bank within the authorization network.

Issuing Bank

A financial institution that issues GSA SmartPay cards/accounts to card/account holders and is responsible for paying the acquiring bank for the goods/services purchased.

Interchange Fee

A fee paid by the merchant’s financial institutions to the card issuing bank for processing its customer merchant payment transaction. In most instances, the interchange fee is a percentage of the total transaction amount and is passed on to the merchant through its financial institution’s fees.

Brand Network

A financial institution that dictates where payments can be processed and facilitates the payment process between card/account holders, merchants, and issuing financial institutions.

Processing Fee

A percentage-based fee charged by the acquiring bank to the merchant on every payment processed.

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