Card Network/ Card Association

A network of Issuing Banks and Acquiring Banks (and Payment Institutions) that process Transactions. The most well-known Card Networks are Visa, Mastercard, American Express, China UnionPay, Discover, Diner’s Club, JCB, Mir, and others. 

How does Card Network work?

Card Network connects Acquirers with Issuers so that a Customer’s Transaction can be verified. They provide the general infrastructure based on which all payments are processed. Card Network ensures that the Transaction is attributable to the proper Customer and that the Issuer bills him/her.

Card Network works by providing infrastructure to Issuers and Acquirers which facilitates execution of Transactions. It basically follows three steps: 1. Capture 2. Authorisation by the Cardholder, 3. Clearing, 4. Settlement of the Transaction. 

1. In first instance for Card Network to be engaged the information of the Card must be captured by the Merchant in order to be further processed.

2. The cardholder’s Issuer is determined by the Card Network by the request of the Acquirer. The security measures are then checked and provided to the approval of the Issuing bank, then the order is by Card Network to the Acquirer and Merchant receives the approval and cardholder receives the receipt.

3. After this Clearing starts and Card Network receives the information about the order, the information is validated by the Card Network’s Clearing System, and then data is prepared for the cardholder’s statement.

4. Final process is Settlement when the payment is sent to the Card Network’s counterparty to settle the funds. The payment is then sent to the Acquirer. Subsequently, Merchant is paid from the Acquirer and cardholder is billed by the Issuer.

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