Credit cards come with unique colors and designs that set them apart from one another. But they all have common brand logos on the front or back of the card, such as Mastercard's interlocking circles. These logos represent the card network that backs your card and the financial institution that issues your credit card, known as the card issuer.
Networks and issuers play very different but essential roles in how yourcredit cardworks.Card networks and issuers work together toprocess transactions from bank to bank, plus they facilitate where you can use your card. There are even some companies that act as both a network and an issuer, which allows them to control more of the transaction process.
Below, CNBC Select reviews the differences between a credit card network and card issuer so you can understand where your card is accepted and the benefits you can receive.
Credit card network vs. card issuer
- What are credit card networks?
- What are credit card issuers?
- How credit card networks and issuers work together
- Bottom line
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.
However, the major card networks have reached similar acceptance rates: Visa and Mastercard are accepted at 10.7 million U.S. locations while Amex and Discover are accepted at 10.6 million U.S. locations at the end of 2019, according to the Nilson Report.
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 the Costco Anywhere Visa® Card by Citi (see rates and fees) and use it to purchase food at Costco. The four players involved in the entire payment process include you (the consumer), Costco (the merchant), Visa (the network) and Citi (the issuer).
The action of paying with your credit card initiates a sequence of events. Here's the process:
- You swipe, insert or tap your card at checkout.
- Costco sends the transaction to Visa.
- Visa sends the transaction to Citi.
- Citi will review the transaction and approve or deny it, then send the decision back to Visa.
- Visa passes it along to Costco 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.
Bottom line
Once you know the difference between a credit card issuer and network, you'll have a better understanding of the benefits you can receive from your card and where it's accepted. Knowing how networks and issuers work can also help inform the next credit card you open.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
FAQs
credit card network. A credit card issuer, or issuing bank, is the financial institution that gives people credit cards. For example, if you have a credit card through your primary banking institution with their logo and the Visa logo on it, the bank is the credit card issuer and Visa is the credit card network.
What is the difference between card network and issuer? ›
Networks aim to maximize the total volume and number of transactions to generate more interchange fees, while issuers aim to minimize the fees they pay to networks and maximize the fees they charge to customers. At times, these differing motivations can create points of tension or conflict between networks and issuers.
Is Amex a network or issuer? ›
The four major credit card networks are Visa, Mastercard, American Express and Discover. Two of these, American Express and Discover, serve as both the network and issuer. Not all merchants accept credit cards from all networks.
What does the credit card network do? ›
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.
What is a credit card issuer? ›
Credit card issuers are institutions—like banks and credit unions—that supply credit cards to consumers. They're the lender a cardholder borrows money from. Capital One is an example of a credit card issuer. An issuer's name, logo or contact information is usually displayed on the card.
What is an example of a card network? ›
Examples of card networks include Visa®, Mastercard®, American Express®, Discover®, China UnionPay®, and JCB®. Some card networks, such as Visa and Mastercard, partner with industry members to perform different tasks throughout the payment lifecycle.
Which card brands are both payment network and issuer? ›
Discover and American Express are both payment networks and issuers (although some of their cards might also be issued by banks; Wells Fargo, for example, has offered several American Express cards).
Is Chase a card issuer? ›
Credit card issuers are lenders. These are credit unions or banks, like Chase, that take on the inherent risk of lending unsecured credit to consumers. When you apply for a card, you do so through the issuer.
Is Wells Fargo a card issuer? ›
Private label credit cards (Wells Fargo Retail Services accounts) issued by Wells Fargo Bank, N.A.
Is American Express a credit card issuer? ›
American Express is a global payment network, but it's also the second largest issuer of credit cards in the U.S. (behind JP Morgan Chase). There are over 112 million different American Express cards available worldwide, but the company also offers checking and savings accounts, loans and business lines of credit.
Credit card and payment networks you need to know
Almost everyone knows the four largest credit card companies: Visa, Mastercard, American Express, and Discover.
What is the most used credit card network? ›
While Visa and Mastercard have long been the most widely accepted credit card networks worldwide, American Express and Discover have been working on expanding their footprints in the U.S. and abroad.
Which credit card network is best? ›
The most widely used card payment system worldwide is Visa. It offers credit cards as well as debit cards. While Visa enables card-based electronic fund transfers, it does not issue cards or set the terms and conditions or fees.
Is Capital One a card network? ›
Many card issuers, including Capital One, work with both Visa and Mastercard. Capital One is a card issuer, and Visa and Mastercard are credit card networks. Capital One works with both Visa and Mastercard.
Who issues American Express cards? ›
Citibank, First National Bank of Omaha, USAA, Navy Federal, Synchrony Financial, and US Bancorp issue American Express cards. Citi issues the Macy's and Bloomingdale's American Express cards along with Citi-branded cards. Wells Fargo issues American Express cards under their own brand and for Dillard's.
Who is the most popular credit card issuer? ›
The top 5 credit card issuers by market share are Chase, American Express, Citi, Capital One, and Bank of America, which collectively control more than 50% of the existing credit card market. Chase has been at the top of the market-share rankings since 2014.
What is the difference between card network and processor? ›
The payment processor forwards the transaction information to the acquirer, who sends it to the card network. The card network directs the transaction to the issuing bank for authorization. The issuing bank verifies the card details and checks the availability of funds in the customer's account.
What is the difference between payment gateway and card network? ›
A payment gateway is a network that collects, verifies and performs fraud checks on customer's credit card information before sending it to the payment processor. A payment processor is a service that routes a customer's credit card information between the customer's bank and the merchant bank.
What does issuer mean on debit card? ›
The issuer, also called the issuing bank or card issuer, represents the customer in a transaction. The issuing bank is the financial institution that supplies an individual with a payment card they use to initiate a transaction. An issuer can be a bank, credit union, or other financial institution.
