Card Network

Card Network, also known as a card scheme, is a financial infrastructure that facilitates the communication and transaction flow between various entities involved in electronic payment processing.

Comprising major entities such as Visa, Mastercard, American Express, and Discover, card networks form the backbone of the global payment ecosystem. These networks establish and govern the rules and standards that govern transactions, ensuring seamless interoperability between merchants, acquiring banks, issuing banks, and payment processors.

The key functions of Card Networks are the following:

• Authorizing cards: Card networks provide the infrastructure and technology for issuing banks to produce and manage payment cards, such as credit cards, debit cards, and prepaid cards. They also facilitate the authorization process, ensuring that cardholders have sufficient funds to make a transaction.
• Processing transactions: Card networks handle the routing of transactions between merchants, acquirers, and issuing banks. They provide secure communication channels and protocols for transmitting sensitive financial information, ensuring the integrity of transactions.
• Settlement and clearing: Card networks facilitate the settlement and clearing of transactions, which involves transferring funds from the cardholder’s account to the merchant’s account. They manage the intricate process of reconciling financial records and ensuring timely payments.

Card networks play a crucial part in authorizing and settling transactions, defining security protocols, and overseeing the transmission of payment data. Their widespread adoption enables cardholders to use their payment cards globally, fostering international commerce.

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