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
Networks establish the rules and infrastructure for global digital transactions, aiming to maximize volumes in order to generate interchange fees. Issuers issue physical cards to customers, determine their spending limits, and charge fees in order to boost revenue and profits per account.
What is the difference between card network and issuer? ›
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 does a 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 the name of the credit card network? ›
Credit card issuers
| Credit card issuer | Popular card example | Network |
|---|
| Chase | Chase Sapphire Preferred® Card | Visa and Mastercard |
| Citi | Citi Custom Cash® Card | Mastercard |
| Discover | Discover it® Cash Back | Discover |
| Synchrony | Sam's Club® Mastercard®* | Mastercard |
6 more rowsApr 19, 2024
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 Chase a card issuer? ›
This set of numbers collectively identifies the financial institution, such as Chase, that is issuing the card.
Is Capital One a card network? ›
Credit card networks run the technology that processes the card payments—among other functions. In other words, the credit card issuer is the one you'll be paying back for your purchases. For example, Capital One is a credit card issuer that works with the networks Mastercard and Visa.
Who is the most popular credit card issuer? ›
Chase (JPMorgan Chase & Co.)
Chase is arguably the top credit card issuer in the U.S., both in terms of purchase volume and card volume.
What is an example of a card issuer? ›
A card issuer enables cardholders to pay for goods and services. It is the bank that has issued the credit or debit card to the customer. Issuing banks are members of the card scheme, such as Visa and Mastercard, but they can also operate as both issuer and card scheme—for example, American Express.
Visa has been the foremost card network for purchase volume and transaction value for some time. That trend continued throughout 2023, with the company seeing more than twice as much spent on their cards than the nearest rival, Mastercard.
What are the top 3 card networks? ›
The four major card networks are Visa, Mastercard, American Express and Discover. The tricky part is that two of the world's largest card networks – American Express and Discover – also issue credit cards. If you aren't sure which company issued your credit card, check the plastic.
Is Mastercard a credit card network? ›
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 issuer mean on debit card? ›
A card issuer, also called an issuer or issuing bank, is an institution that provides individuals and businesses with physical or virtual cards to pay for goods and services.
Why is my card saying contact card issuer? ›
It's often a result of a customer not having enough funds in their account, but it could also be a sign that the customer is attempting card fraud. Card issuer rejection is designed to protect all parties, which is why it's a vital component of both the online and in-person card payment process.
What does it mean refer to card issuer? ›
Response Code: 01 Refer to issuer
Credit card declined code 01 means that the card's issuer has signaled a problem with the card number. The customer should contact their issuing bank and use a different card to complete the transaction. Once the customer contacts the issuing bank, they can resolve the issue.
What does declined by card issuer mean? ›
A very simple reason why a customer's card is declined is due to insufficient funds. As part of the payment authorization process, the card issuer will check to see if there are adequate funds in the consumer's account before approving the payment. If there isn't enough money, the transaction will be declined.
