What Is a Credit Card Network?

Hint: It’s not the same as your credit card issuer

Four bank and retail credit cards are in a pile with VISA logos displayed

 Justin Sullivan / Staff/Getty 

If you take a glance at your credit card, you'll see different numbers and names that identify where the card comes from and which brand it's associated with. One thing to note is your credit card network, which is not always the same as your card issuer

Knowing which network your card operates on is helpful if you're interested in understanding how payment transactions are processed and where your card is (or isn't) accepted. 

What Is a Credit Card Network?

When you dip, tap, or swipe your credit card to make a store purchase or enter your card number online, you're requesting that your card issuer pay the merchant. But that payment first has to go through a credit card network 

These networks authorize, process, and set the terms of credit card transactions, and transfer payments between shoppers, merchants, and their respective banks. 

The network passes information between the merchant’s acquirer (bank) and your card issuer (the company that issued your credit card) to decide if you can make the purchase or not. In some cases, the card network and the card issuer can be the same company, such as with American Express and Discover. 

Visa and Mastercard payment card networks (PCNs) cover credit cards, prepaid debit cards, gift cards, and traditional debit cards. AmEx’s PCN includes credit cards, gift cards, and prepaid debit cards only, while Discover’s PCN includes credit cards and its Cashback Debit checking account. 

How Credit Card Networks Operate

PCNs operate behind the scenes, yet the process is fairly straightforward. Here's a step-by-step example of a credit card network’s function when you use your card to make a purchase. 

  1. To pay for a $23 haircut, you swipe or dip your card at Lola’s Hair Salon point-of-sale system (POS), using an ABCD Bank Visa. 
  2. Lola’s POS transmits your card information and the dollar amount to Linda’s acquirer (or her bank). 
  3. The bank then sends the request to your card’s network, Visa.
  4. The Visa network then electronically "talks" to your card issuer, ABCD Bank, to determine whether to approve or deny the transaction.
  5. ABCD Bank approves the transaction, and the PCN transmits the approval back to Lola’s POS system. The card issuer charges you $23 for the transaction and Lola’s bank receives $23 (minus fees). 

The whole process is fast-paced and over in seconds. 

The Major Credit Card Networks

There are four primary companies that act as credit card networks for payments processing:

  • Mastercard
  • Visa
  • American Express
  • Discover

Of these four, Visa and Mastercard are payment networks only. Neither company issues credit cards direct to consumers, though you will see the Visa and Mastercard logos appearing on many cards, identifying either one as the card's payment network. Additionally, Visa and Mastercard can and do administer certain credit card benefits

For example, Visa oversees the Visa Signature benefits associated with certain credit cards, such as premium rental car privileges and hotel discounts. Mastercard has its own suite of card protections and benefits, such as identity theft protection and extended warranties.

American Express and Discover are both credit card networks and credit card issuers. Each company issues credit cards and processes payments for cards bearing their respective logos. 

Retail store credit cards may operate on their own, smaller credit card networks. These networks limit you to making purchases with your store credit card only at those stores.

Does Choice of Credit Card Network Matter?

Yes, for one simple reason. Merchants aren't required to accept credit cards from every payment network. So, a grocery store or gas station may accept Mastercard or Visa as a form of payment, but not American Express or Discover credit cards. If you’re traveling, card networks overseas can vary from what you’re used to in the United States. 

If you routinely spend money at the same merchants or you have multiple credit cards operating on different card networks, that may not be a problem. But if you’re planning to travel outside of the U.S. with a card such as American Express, view online maps of acceptance locations. 

Merchants may choose and accept credit card networks based on cost. Issuers and four card networks charge and split fees to process payment transactions. Fees vary, but some networks are less expensive for merchants to use than others. American Express, for instance, tends to charge the highest processing fee. 

If a retailer is keeping a close eye on the bottom line, it may opt to accept payments only on low-fee card networks. This might be a money-saver for them, but it’s potentially inconvenient for you. 

If you have questions or problems with your Visa or Mastercard cards, call the card’s issuing bank, not Visa or Mastercard, to resolve them. For questions and problems with American Express or Discover cards, contact them directly. 

Takeaway: Choose a Card Network

Whenever shopping someplace new, investigate which credit card networks are accepted beforehand. Consider keeping multiple (and different) cards from different card networks, or just plain old cash, in your wallet so you always have a backup payment option. 

Article Sources

  1. Cardinal Commerce. "What Is a Card Network?" Accessed Nov. 17, 2019.

  2. Visa. "Visa Signature Credit Cards," Accessed Nov. 17, 2019.

  3. Mastercard. "Mastercard Benefits," Accessed Nov. 17, 2019.

  4. American Express. "American Express Maps," Accessed Nov. 17, 2019.