Maria Adams, Credit Cards Moderator
A credit card network mainly authorizes and processes credit card transactions, as well as determines where credit cards can be used. There are only four major credit card networks in the U.S. (Visa, Mastercard, American Express, etc.) and some of them, like American Express, are also credit card issuers.
When you make a purchase using a credit card, payment processors use a card network to communicate transaction information between the merchant's bank and the credit card company that issued your card. The card networks also offer benefits to cardholders, and help monitor and prevent fraudulent transactions.
How Credit Card Networks Work
- Facilitate transactions between the merchant and the issuer of a credit card.
- Decide where credit cards can be used.
- Provide supplemental benefits like travel insurance or purchase protection.
- Monitor transactions and work on fraud prevention.
- Create rules for credit card manufacture and usage.
It’s also worth noting that Visa and Mastercard are the two largest card networks, boasting a significant advantage in terms of worldwide acceptance. More specifically, they are accepted by more than 10.7 million merchants in the U.S. and more than 200 countries and territories, internationally.
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