Do you know your Credit Card Network? Find here

What Is a Credit Card Network?

Money has always remained an essential part of man's life. From the olden times, we had always searched for the sources of a good exchange.

Credit Card Network 101

When knowledge became popular among the masses. They tended to seek the ways through which trade could happen. Passing different ages, today we stand at the credit and debit card age. This has revolutionized the whole world. As the medium of transaction has become more convenient than ever before. Now-a-days, we simply swipe up the card and things get done in minutes. This convenience has made us addicted to it. We as users, enjoy banking services all the time. But, have you ever seen your credit card for any further details? Your credit card is much more than just a tool for easy payments. Today, we will tell you some interesting facts regarding this. Your credit card, basically is made up of two units. One is called the credit card issuer. This is the source which originally issued your credit card. This is most of the time, your bank in which you are having an account. But, the second unit is a bit different. It is called "Credit Card Network", it refers to the network or chain by which your credit card is operating. You can get this idea, by a simple understanding. Let's consider the example of a gift packed in a box. Now if you want to open up the gift, first you have to remove the box. A credit card network works the same for you. You can find out about the credit card network just by looking at your card. There are a series of numbers over the card. These numbers include the names of the brands to indicate which source and how the card has been issued. Many of us are very conscious of our transaction modes. In other words, how does a transaction work? Credit card networks can be of great help at all these times. Alongside, it also provides you with the information of your payment validity. In simple words, whether or not a payment be accepted over a specific platform? All this information can be directly obtained by getting some basic know-and-hows to credit card networking mechanism.

Still con fused? Wait we tell you How a Credit card network works?

Whenever you plan a hangout with friends, or it's online shopping. The deadline is near and you have to pay for the bills. What do you do at such times? Take your card out? Swipe it or enter it online? That's your approach towards every monetary situation, you are supposed to tackle with. But, what happens after this swipe is another story. This is where the credit card network comes to action. Actually, at times, when you are swiping up your card. This indicates that you are requesting your card issuer, or the bank to pay for your expenses. This simple card swipe, at first wakes up the complex card networking system. This system is responsible for processing your request. It accepts, verifies and then finds out whether or not the transaction is possible or not. Don't get too confused. It's very simple. Many times, banks have certain distinguishing payment modules. They don't accept any kind of payment, from a certain type of card. There are certain policies behind this. In certain places, you are not allowed to pay through the Discover. This is because of the network constraints. As, the real purpose of a credit card network is to transfer information of transaction. This transaction happens from you to the account of the payment holder. If there is a restriction put forth in between the bank account and the card networking company. The transaction would simply be rejected. Through this, you will find out the way to carry out the right type of transaction.

What is the mechanism of working for the Credit Cards Network?

The actual work is done soon after you swipe up your card. But, the networks are all time interactive in processing the account's information. This is because of this ordered processing, that transaction becomes possible at the end. We will clear you the whole mechanics with a comprehensive example.

● Your mates are in town, you all plan a hangout and decide to watch a movie. Now when you are at the ticket counter. You swipe up your card for the tickets purchase on the point-of-sale system [POS]located there. Remember, that you have used your specific Visa or Mastercard, issued by your specific bank.

● As soon as the swipe up procedure is done, the card network system begins to work. The overall balance of your cardis already being processed. Now the details of the amount needed for the purchase will be sent to the cinema's respective bank account.

● The third step is based on the card networking system. Here, the cinema's associated bank sends information to your card networking system regarding your purchase information. Whether the network is Visa or Mastercard.

● Your network provider, i-e Visa or Mastercard, then coordinates with your bank account, in other words, it contacts the card issuer.

● Based on your account balance, and the bank's policy, it decides whether to accept or deny this transaction.

● Once approved, immediately, things turn back to the Card network provider. It processes this approved transaction to the POS system of cinema, which then verifies it. It charges the required amount from the card alongside the transaction fee.

This whole procedure takes place within seconds. That is one reason, you never get an idea how the whole card transaction procedure works out.

Top Most Credit Card Networks and how do they work?

Top Most Credit Card Networks and how do they work?
Top Most Credit Card Networks and how do they work?

The top most networks, benefitting their clients, through their services are:




American Express

All of these companies work according to their own policies. Visa and Mastercard never becomes the card issuer. In other words, a valid bank account is needed. Through this, the main card issuer is your respective bank. But, you can still find out your card providing networks on the top most of your card. Here, the logos of the network providers give you an idea about your mode of transaction. Do you know that each card network provider has certain features associated with it? These features are specific in terms of usage. For instance: Mastercard provides you with complete protection from identity theft and fraudulent acts. It also works in collaboration with certain brands most of the time. By which, you can get quite a good percentage of discount by using this for all the purchases you make.

Discover and American Express, whilst are used for making payments. It also serves as the card issuer company at the same time. This is very interesting. Here the payments and the services both are maintained by a single company. But, the downside of such credit cards is their minimal usage. They can be used to pay for few purchases at specific stores only. Most of the time, they don't allow you to make international purchases because of being area specific. As, their data-base restricts them to carry out payments across the globe. But, this limitation is not present in the case of Visa and Mastercard. They approve international payments carried out all across the globe.

But does it really matter whatever kind of card you choose to have?

As you have read all the previous facts about the mechanism of action. So, you will be able to answer this question on your own by now. Well! The answer is yes! It does. The most dominant reason for this is the payment module. As, we have already explained that certain payments cannot be made using specific cards. This means that you cannot use each and every single card you have for payments all the time. This becomes very prominent especially when you travel outside the USA. In these conditions, you cannot expect to pay with the help of Discover or American Express. Because, these networks are only active inside the USA. In case you are travelling, all the major payments will be made through Visa and Mastercard. Because, these networks are globally acknowledged. The restrictions even work for some areas within the US. There is a specific map of acceptance with respect to locations available. By using that, you can easily find out where you can use your card and where you can't.

Another reason for choosing the right kind of card wisely lies in the transaction processing rates. We know that whenever we have to use the card. We are eligible to pay the processing fee. This processing fee is in accordance with the type of card we are using. The rates of the processing vary with respect to the area as well. But in most of the areas all across the US, American Express has the highest transaction processing rates. This can make it a bit difficult for you to carry out large payments everytime by paying extra charges too.

So, what should be done?

There are few steps you can follow before going shopping. This can avoid any mishap and any sort of bad experience.

  1. Whenever you are going out, take a look at the type of card you are using.
  2. Before making any final purchase, confirm with the management, whether or not they accept the card you are having.
  3. Though credit card shopping is convenient and we all love it. But, cash payment is still in town. Always take a considerable amount of cash out with you, so that it never ends up being a bad experience.

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