Card Scheme
A payment network that facilitates card transactions between issuers and acquirers.
What is Card Scheme?
A card scheme (or card network) is the organization that operates the network infrastructure connecting issuing and acquiring banks to facilitate card transactions. Major card schemes include Visa, Mastercard, American Express, and Discover. Card schemes set network rules, establish interchange rates, manage brand standards, and handle transaction routing. They don't issue cards directly (except Amex, which is both network and issuer) but provide the framework for banks to do so.
Why It Matters
Card schemes set the rules that govern your card acceptance. Their interchange rates are the largest component of your costs. Network rules affect everything from surcharging policies to dispute procedures. Understanding that Visa and Mastercard are networks—not banks—helps clarify who controls what in the payment ecosystem.
Related Terms
Interchange Fee
The fee paid by the merchant's bank to the cardholder's bank on every card transaction.
Acquirer vs Issuer
The two banks in a card transaction—one serves the merchant, the other serves the cardholder.
Bank Identification Number (BIN)
The first 6-8 digits of a card number that identify the issuing bank.
PCI Compliance
Adherence to security standards for organizations that handle credit card data.
Frequently Asked Questions
Both are card networks with similar functions. They compete for bank partnerships, set slightly different interchange rates, and have different network rules. For most merchants, acceptance and pricing are comparable.
Amex operates as both network and primary issuer (closed loop). They control the entire transaction. Visa and Mastercard license their brands to banks who issue cards and acquire merchants.
Generally, but with consequences. Card network rules allow merchants to refuse acceptance, but you'd lose those customers. Some merchants don't accept Amex due to higher costs.
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