Card Network (Card Scheme)

A card network, also called a card scheme, is an organisation such as Visa, Mastercard or RuPay that operates the infrastructure and rulebook through which card transactions move between the merchant's bank and the cardholder's bank.

Why it matters

The network sets technical message formats, security requirements, fee schedules and dispute rules that every participant must follow. This shared standard is why a card issued by a bank in one country can be used at a shop served by a bank in another. For merchants, the network also determines which cards they can accept, and a payment gateway usually handles the connection. Some networks, like Visa and Mastercard, mainly run the network and leave issuing to banks; others, such as American Express, can also act as an issuer.

Example

The common flow in a four-party model:

1. The cardholder pays at a merchant.
2. The merchant's acquirer sends an authorisation request to the network.
3. The network routes it to the issuer, which approves or declines.
4. The answer returns along the same path in about a second.
5. Later, clearing and settlement move the money.

Common mistakes

• Confusing the network with the issuer. The issuer is the bank that holds the account and sets cardholder terms.
• Assuming all networks charge the same fees.
• Forgetting that local schemes may be preferred or required in some countries.

Rules vary by country; this entry is a definition only.

Related

• Acquirer vs issuer
• Interchange fee
• RuPay
• Payment processor

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