What is a Card Processing Network?

A card processing network (also called a credit card processing network) is a financial organization that facilitates card-based payments. Some of the most common card processing networks are Mastercard, Visa, Discover, and American Express (AmEx), as well as UnionPay in China.

In 2022, Visa was the most popular card processing network with 242 billion total card transactions (followed by 213 billion for UnionPay and 150 billion for Mastercard).

What these card networks do is fairly straightforward: they offer infrastructure for digital payments. They create the rules and pathing that makes it possible to accept, authorize, verify, and ultimately approve card transactions. You may hear the term debit or credit card “rails” - which refers to the infrastructure that enables card-payments. It’s an apt metaphor - think of the card brands as the railway company that lays down the train tracks. They manage and standardize the construction of rail lines, set rules for the signals and practices locomotives must follow, and bring order and safety to the world of commerce. 

For many years, accepting payments from one or many payment networks was a hassle — but the credit and debit card business was still a backseat to cash. We now live in a world which spends on plastic and many merchants now support all four major payment networks. There are now thousands of debit card and credit card products in addition to card-products like gift cards. These are created by card issuers (often working with a partner, such as an airline or your favorite retailer) that work with the card networks. These issuing banks and financial firms offer cards in partnership with one of these payment networks. 

Visa, Mastercard, Discover, and AmEx also form the PCI Security Standards Council (SSC) alongside Japan’s JCB International. The PCI SSC acts as an authority in the payments industry, regulating and enforcing the PCI Data Security Standard (DSS) to protect cardholder information.  The rules set by this consortium are not guidelines, but the ground-rules participants must abide by in order to participate in card-payments. While the card processing networks establish a smooth infrastructure for card payments, they also make requirements of the other players, principally to ensure a safe-processing environment for cardholders. This includes both in-person payments and digital payments, though networks have placed an increasing amount of emphasis on optimizing digital payments over recent years with the surge in card-not-present volumes and activity. 

As such, card processing networks not only facilitate card payments but also outline the rules and requirements for merchants to follow when accepting card payments. Overall, card processing networks enable merchants to accept, authorize, and approve card payments. Source