Buyers, sellers, and both issuer and acquiring banks communicate via card networks. An “acquiring bank” processes card transactions on behalf of merchants. There’s a whole ecosystem involved in card transactions, including the issuing bank, (payment) card network, acquiring bank, merchant, and finally, the cardholder.Īn “issuing bank” distributes payment cards, sets the cardholder’s ability to purchase, manages rewards (credit cards only) or offers, and approves (or declines) purchase requests. It’s made up of both card networks like Visa, MasterCard, Discover, JBC, and other networks like Zelle (interbank network), Popmoney, Cirrus, Plus, and others. What is a (Payment) Card Network?Ī payment network is an association of member banks that facilitates the payment transaction between the merchant and issuer, i.e., the requestor (cardholder to the merchant to acquiring bank) and source (issuing bank) of funds. So instead of fantasizing about globetrotting (come on, vaccine!), let’s take a trip through card networks and how they work. Now, it’s likely you’re here as a fintech or neobank thinking about issuing your own card. And the cards they process are accepted everywhere: how else can I attend the opera in Milan, buy a new suit in Shanghai, and take a cruise down the Nile, and pay for everything with the one plastic rectangle in my wallet – or even just my phone? They are secure: American Express (AmEx) guarantees you will never pay for something you did not buy. Today, card networks are lightning-fast: Visa’s network can process over 65,000 transactions per second. In the Internet era, fintech architects use similar methods to accomplish similar goals, but on a much bigger scale.
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