Card Issuers

What are credit card networks?

The role of a card network is to facilitate transactions between merchants and card issuers. To do this, card networks create virtual payment infrastructures and charge merchants interchange fees for processing consumers’ credit or debit card transactions.

The four major credit card networks are Mastercard, Visa, American Express and Discover. Out of the four networks, two are also card issuers — Amex and Discover — which we explain more in the next section.

In addition to aiding transactions, card networks determine where credit cards are accepted. Not every merchant accepts all networks, and you may notice different network logos at checkout or some merchants stating they don’t take certain cards.

Last, card networks have partnerships across numerous industries relating to travel, transportation, dining and entertainment. Having a card within a certain network may entitle you to travel perks, purchase protections and more depending on your terms and benefits.

What are credit card issuers?

Credit card issuers are financial institutions that provide cards and credit limits to consumers. Issuers manage numerous features of credit cards, from the application and approval process to distributing cards, deciding terms and benefits (such as annual fees and rewards), collecting cardholder payments and more.

Card issuers also determine how much credit to extend to you and have the final decision on whether a transaction you make is approved or denied (more on how transactions are processed below).

Here are some major credit card issuers:

• American Express
• Bank of America
• Capital One
• Chase
• Citi
• Discover
• U.S. Bank
• Wells Fargo

How credit card networks and issuers work together

Card networks and issuers work together to process transactions that consumers make at merchants.

For instance, let’s say you have a Citibank Visa Card and use it to purchase food at Fairprice. The four players involved in the entire payment process include you (the consumer), FairPrice (the merchant), Visa (the network) and Citi (the issuerIssuer Issuer (or Issuing bank) A bank that issued a card for a shopper to make cashless payments via an ecommerce website, inside a mobile app, or in a physical store. To be able to issue a card, an issuer must be a member of one or several card networks. Sometimes a shopper’s bank is referred to as an issuer even if there is no card issued. This is to distinguish between a shopper’s bank, which sends funds, and a merchant’s bank, which acquires funds.).

The action of paying with your credit card initiates a sequence of events. Here’s the process:

1. You swipe, insert or tap your card at checkout.
2. FairPrice sends the transaction to Visa.
3. Visa sends the transaction to Citi.
4. Citi will review the transaction and approve or deny it, then send the decision back to Visa.
5. Visa passes it along to Fairprice and your transaction will be approved or denied.

This digital communication happens more or less instantaneously with every swipe of your card or scan of your chip.