Explained to kids!
A card network is like a train network for money. It links thousands of banks and shops, so a card from one bank works in a shop that uses another bank. Each network has its own name, its own logo and its own rules.
Let’s see it in real life…
Yusuf is 10. This summer, he crosses the country by train with his aunt Leyla.
At the first station, all the trains are blue. They belong to the Blue Line network.
Aunt Leyla shows a ticket with a blue logo. It works at every Blue Line station, in every town.
"The stations belong to different towns," she says. "But they all follow the Blue Line rules."
Halfway, they must change. The next trains are orange and belong to another network.
The blue ticket does not open the orange gates. Aunt Leyla buys an orange ticket.
The rules change too: on Orange, seats are numbered and big bags cost extra.
A few large stations have both blue and orange platforms. Small stations have only one.
In the mountains, a tiny red network runs its own trains and owns its own stations.
"Blue and Orange only set the rules," says Aunt Leyla. "Red does everything itself."
That is a card network.
Tiny recap
- It means… a set of rules and connections that lets many banks and shops work together.
- It helps when… you want one card to work in millions of shops, even far from home.
- Watch out for… a shop that does not accept your network. Look for the logo on the door.
…detailed for specialists
Card networks, also called card schemes, are the organizations that set the rules, brands and technical systems allowing a card issued by one institution to be accepted by a merchant served by another. Visa, Mastercard, American Express, Discover, JCB and UnionPay are the six global card networks, next to many domestic schemes.
For PSPs, PayFacs and platforms, card networks define the playing field in 2026: who may acquire, what a transaction costs, which data must be sent and how disputes are settled. Each network added to an offer brings new customers for merchants, and new rules, fees and certifications for the operator. Choosing which networks to support, and how to connect to them, is a commercial and technical decision.
What are card networks?
Card networks are payment schemes for cards. A scheme is a single set of rules, practices and standards for carrying out card payments, together with the brand that cardholders and merchants recognize. The network usually also runs the switch that carries authorization and clearing messages.
European law gives precise definitions. The Interchange Fee Regulation of April 29, 2015 defines a four-party payment card scheme as one in which payments go from the payer’s account to the payee’s account through the scheme, an issuer on the payer’s side and an acquirer on the payee’s side. A three-party scheme is one in which the scheme itself provides acquiring and issuing services.
The four-party model explains why the same card works everywhere. A bank in one country and an acquirer in another have never signed a contract with each other. Both have signed with the network, and that is enough. The network guarantees that an authorized payment will be settled and that a dispute will follow known rules.
A network does not lend money to cardholders or hold merchants’ funds in a four-party model. Issuers and acquirers do. The network sets the rules between them and charges fees for its services, which are covered in our episode on scheme fees.
Related notions:
- Issuer: the institution that provides the card to the cardholder.
- Acquirer: the institution that contracts with the merchant and receives the funds.
- Open loop: a network whose cards work at any merchant that accepts the brand.
- Closed loop: a network in which one company is the issuer, the acquirer and the network.
- Domestic scheme: a network that operates in one country, such as Cartes Bancaires in France or girocard in Germany.
- Co-badging: two networks on the same card, typically a domestic and an international one.
- Interchange: the fee the acquirer pays the issuer, explained in interchange fees.
Visa vs Mastercard vs Amex: how do card networks compare?
Card networks differ mainly in their model, their reach and their origin. The list below covers the six global brands.
- Visa: four-party network. Banks and other institutions issue cards and acquire merchants. Present in more than 200 countries and territories.
- Mastercard: four-party network with the same structure. Also operates the Maestro debit brand.
- American Express: historically a three-party network. It issues cards and acquires merchants itself, and it also licenses partners to issue and acquire in about 110 countries and territories.
- Discover: US network with an integrated model, which also includes Diners Club International. Capital One completed its acquisition of Discover on May 18, 2025.
- JCB: Japanese network, issuer and acquirer in Japan, with licensed partners abroad.
- UnionPay: Chinese network, bank-issued, accepted in 183 countries and regions according to UnionPay International.
Domestic schemes complete the picture. Many countries have a national debit or credit network that is cheaper for local payments and often co-badged with Visa or Mastercard for use abroad. For an operator, a French, German or Brazilian merchant cannot be served well with the international brands alone.
Networks also cooperate. Discover Global Network states that its network processes JCB and UnionPay transactions in certain territories, including the United States. A merchant that accepts one brand may accept others through such alliances.
How do card networks work?
In a four-party network, every payment crosses four institutions under the network’s rules. The steps, from the merchant to the issuer and back, are:
- Membership. Issuers and acquirers join the network as members or licensees and receive identifiers, including BIN ranges for cards.
- Merchant contract. The acquirer, directly or through a PSP or payment facilitator, signs the merchant and commits to the network’s rules.
- Payment. The cardholder presents a card. The merchant’s terminal or gateway reads the brand from the first digits of the card number.
- Authorization. The request goes from the merchant to the acquirer, through the network’s switch to the issuer, and the answer returns the same way.
- Clearing. The acquirer submits the completed transactions. The network calculates what each issuer owes each acquirer, including interchange.
- Settlement. Funds move between issuers and acquirers through the network’s settlement bank. The acquirer then pays the merchant.
- Fees. The network bills issuers and acquirers for its services.
- Disputes. If the cardholder contests a payment, the network’s dispute rules decide who bears the loss, as explained in our episode on the chargeback.
In a three-party network, steps 4 to 6 happen inside one company, which is both issuer and acquirer.
Card networks in numbers (2026)
The six global brands publish detailed figures. Key data:
- 828 billion: purchase transactions on Visa, UnionPay, Mastercard, American Express, JCB and Discover cards in 2025, up 7.1%, according to the Nilson Report. Visa’s share was 40.76%.
- USD 14.2 trillion: Visa’s payments volume in its fiscal year 2025, with 4.9 billion payment credentials, in its annual report.
- 3.7 billion: Mastercard and Maestro-branded cards at December 31, 2025, for a gross dollar volume of 10.6 trillion dollars, in Mastercard’s fourth-quarter 2025 release.
- 152.8 million: American Express cards-in-force at the end of 2025, of which 66.2 million issued by partners, in its annual report.
- 181.9 million: JCB cardmembers in March 2026, with about 72 million merchants, according to JCB’s corporate overview.
- 61%: share of euro area card transactions handled by international card schemes in 2022, according to the European Central Bank, which notes that 13 euro area countries rely on them entirely.
What are the risks and limits of card networks?
Card networks make global acceptance possible. They also concentrate power, cost and operational dependence.
- Rule changes. Networks update their rules several times a year. Each release can change data requirements, fees or dispute conditions, and operators must follow.
- Cost. Scheme fees and interchange make up most of a merchant’s card cost. In the EU, interchange on consumer cards is capped at 0.2% for debit and 0.3% for credit, but scheme fees are not capped.
- Uneven coverage. A network strong in one region is marginal in another. A merchant selling to Japanese or Chinese travelers without JCB or UnionPay loses sales.
- Separate contracts. American Express often requires its own merchant agreement and settlement flow, distinct from the Visa and Mastercard acquirer.
- Dependence. Europe’s reliance on international schemes is a policy concern. Domestic schemes and newer initiatives based on instant payments aim to offer alternatives.
- Co-badging choices. On a co-badged card, EU rules let the merchant set a default brand and the cardholder override it. The choice affects cost and features.
- Currency conversion. Cross-border payments involve a conversion by the network, the issuer or the merchant. See dynamic currency conversion.
- Certification effort. Connecting to a network, directly or through a processor, requires testing and compliance work for each one.
Card networks: what changes for PSPs, PayFacs and platforms
Operators decide which networks their merchants can accept and through which acquirers. Five areas need decisions.
Coverage
The network mix should follow the merchants’ customers. Visa and Mastercard are the base. American Express matters for travel, business spending and higher-income consumers. JCB and UnionPay matter for inbound tourism and cross-border sales, as our guides to payment methods in Japan and payment methods in China show. A global payment network of acquirers and methods lets an operator add coverage market by market. American Express, for example, appears in the NORBr connector catalog.
Connection model
Most operators reach networks through acquirers and processors. Some connect closer to the schemes to gain control over data and cost. The article on direct-to-scheme processing for PSPs and acquirers and the #TheShot episode Why merchants connect directly to card schemes explain the trade-offs. Being scheme ready means the platform already handles the message formats and rule updates each network requires.
Routing and brand choice
Where a card carries two brands, or where several acquirers can process the same brand, routing rules decide the path. Cost, approval rate and features such as tokens or installments differ by network and by acquirer.
Tokens and wallets
Each network runs its own token service, and wallets such as Apple Pay and Google Pay rely on them. A card stored as a network token is refreshed by the scheme when the plastic is replaced, which helps recurring payments. Support varies by network and by acquirer, so an operator should check token coverage brand by brand before promising it to merchants. Our episode on network tokens explains the mechanism.
Pricing and reporting
Fees differ by network, card type and region. Merchants expect them to be explained. Reports should break down volume, approval rates and cost per network, so that adding or removing a brand is a decision based on data.
Disputes and compliance
Each network has its own dispute process, monitoring programs and registration rules. Operators need one workflow that hides these differences from merchants while respecting each deadline. Background reading: the blog article on understanding card networks, the role of each player in who’s who in payments, and the Payments Library report on the digital payments landscape.
Which card networks should an operator support in 2026?
Visa and Mastercard are required almost everywhere, and the others depend on the merchants served. Each additional network adds reach and adds rules. The right set is the one that matches where merchants sell and who their customers are. Data should drive the choice: the share of declined attempts from brands not accepted, the average ticket per network and the extra cost of each one. A network that brings 2% more sales at a higher fee can still be worth adding for a hotel, and not for a local grocery store. What it means by player:
- PSPs: offer Visa and Mastercard by default, and make American Express, JCB, UnionPay and domestic schemes available where merchant demand justifies the integration.
- PayFacs: check which networks the sponsor acquirer covers and under which registration, since each scheme has its own facilitator rules.
- ISOs: make sure terminals are configured for every brand the merchant signed for, including co-badged cards.
- ISVs and platforms: show accepted brands clearly at checkout and report results per network.
Card networks are the rulebooks and the rails of card payments, and operators grow by choosing the networks their merchants’ customers already carry.
Frequently Asked Questions
What is a card scheme?
A card scheme, or card network, is an organization that sets the rules, the brand and the technical standards for card payments between issuers and acquirers. It lets a card issued by one institution be accepted by a merchant contracted with another. Visa and Mastercard are four-party schemes, while American Express traditionally acts as issuer and acquirer itself.
What is the difference between Visa, Mastercard and American Express?
Visa and Mastercard are four-party card networks: they set rules and run the infrastructure, while banks issue the cards and acquirers sign the merchants. American Express traditionally issues cards and acquires merchants itself, and also licenses partners. For merchants, American Express often means a separate contract and different pricing from Visa and Mastercard.
What is a closed-loop card network like Discover?
A closed-loop card network is one in which the same company issues the cards, signs up the merchants and runs the network. Discover and American Express were built this way, while Visa and Mastercard are open-loop networks that rely on banks. Closed-loop networks see both sides of each payment, and today most also work with partner issuers and acquirers.
Should a PSP in Europe accept JCB and UnionPay cards?
A PSP in Europe should offer JCB and UnionPay when its merchants serve travelers or sell cross-border to Asia. JCB reports 181.9 million cardmembers and UnionPay is accepted in 183 countries and regions. For hotels, luxury retail, airlines and tourist areas, these cards bring sales. For purely domestic merchants, the benefit is small.
How does dynamic currency conversion work with card networks?
Dynamic currency conversion lets a cardholder pay in the card’s home currency at a foreign merchant. The merchant’s provider converts the amount at the point of sale and shows the rate and markup. If the cardholder declines, the payment is made in the local currency and the card network converts it, with the issuer adding any fee.
