Credit Card Networks: How Do They Work In Businesses

Credit cards are the most popular payment methods in the US with the total transaction value predicted to $3.843 trillion in 2025. As a small business owner, you are always going to have to deal with credit cards, credit card providers, and the major credit card networks and issuers that power them. This is despite the fact that  a lot of small business owners may not know what credit card networks are and how they work.

Accepting lots of payment methods is just good business and understanding how credit card networks work can give you the best insight into maximizing their potential and minimizing risks.

but knowing how credit card networks work can give business owners insight into how to maximize their usage and minimize risks. Here's what businesses should know. In this article, we're giving you the lowdown on all things credit card networks, including:

• What credit card networks are

• The difference between credit card issuers and credit card networks

• Types of credit card networks out there (with a list of credit card networks)

• How do credit card networks work?

• Processing fees for major credit card networks

Let's get started!

What are credit card networks?

Credit card networks help banks and businesses communicate with each other to process credit card transactions. These networks, issuers, and the banks approve and handle the transactions. On top of this, they decide the terms for each transaction and move money between customers, businesses, and banks. Major credit card networks are Visa, Mastercard, American Express, and Discover, but there are others too.

What is the difference between credit card issuers and networks?

Now onto our next section, the difference between credit card issuers and credit card networks. A credit card issuer (also known as an issuing bank) is a financial institution that provides people with credit cards. All credit card companies operate within a network, but not all of them issue cards directly. For instance, if you've got a credit card with your main banking institution with the bank logo and the Amex logo on it, the bank is the credit card issuer and Amex is the credit card network.

Now, when you use a credit card to purchase something, the transaction request then goes on to the credit card issuer, who then decides whether they're going to authorise it or not. The issuer is the bank that gives the cardholder credit. The cardholder then pays the bank back for any purchases made with the credit card.

Credit card networks can also act as issuers, giving credit directly to cardholders without needing a bank or another financial institution to do it.

Types of credit card networks 

Now that you know what a credit card network is, and how it's different from a credit card issuer, let's get onto the different types of credit cards and networks out there.

Open card network 

Open credit card networks (or open networks) let other financial institutions issue their credit cards to customers. The two most popular open credit card networks are Mastercard and Visa.

Closed card network 

On the other hand, a closed credit card network is a credit card company that exclusively issues credit cards. The credit card network also acts as the acquirer and disburses your customer's funds directly to your company's banks, excluding the transaction fees. Some popular closed networks are American Express and Discover.

How do credit card networks work? 

Credit card networks connect the card issuer and the business for credit card purchases. Here's how they work:

The customer’s transaction starts at the payment terminal 

The customer’s transaction starts at the payment terminal or gas pump, depending on where they're making a purchase. The customer uses their credit card at your business's payment terminal by swiping, inserting, tapping, or entering the card number into your card machine.

The payment processor connects with the credit card network 

Once your customer's used their credit card, your credit card machine or terminal sends the card info to the payment processor, which then contacts the payment network services for approval.

• If the network is the card issuer: The network decides if the transaction is approved or not.

• If there's a separate card issuer: The network checks with the issuing bank for approval.

The credit card network contacts the credit card issuer for transaction approval

The credit card network quickly tells the business if the transaction is approved or denied, usually this decision is made within seconds.

Processing fees of major credit card companies 

Credit card networks charge different fees for each transaction, which is a major factor for businesses when choosing which credit card provider and networks to accept.

Types of credit card fees - opportunity to link back to how to accept credit card payments piece

When a business accepts credit card payments, they'll have to pay two main types of fees for every credit card transaction: interchange fees and assessment fees.

• Interchange fee: The acquiring bank (also known as the merchant’s bank) charges interchange fees. For example, if Wells Fargo issued a customer's Mastercard, the business pays an interchange fee to Wells Fargo whenever that card is used.

• Assessment fee: The credit card network charges the assessment fee. So, for the same Wells Fargo-issued Mastercard, the assessment fee goes to Mastercard on every purchase.

Best Credit Card Issuing Banks in 2025

Looking for a credit card? Here’s a rundown of the top issuers, what they offer, and why they stand out.

American Express

• Originally a freight company, Amex is now a major player in credit cards and banking.

• Offers both a credit card account and charge cards (Pay Over Time feature).

• Huge range of rewards for personal finance, including membership rewards points, which can be redeemed for travel, gift cards, and more.

• Popular cards: Blue Cash Preferred®, Amex Gold Card, Business Platinum.

• J.D. Power Satisfaction Rank: #1

Bank of America

• Started offering credit cards in 1958 and now provides a mix of rewards and secured cards.

• The Preferred Rewards program boosts rewards if you bank with them.

• Popular cards: Unlimited Cash Rewards, Customized Cash Rewards, Travel Rewards.

• J.D. Power Satisfaction Rank: #5

Barclays

• UK-based bank with a strong presence in the U.S.

• Specializes in co-branded travel credit cards (JetBlue, Emirates, Hawaiian Airlines).

• Popular cards: AAdvantage Aviator Red, Wyndham Rewards, Carnival World Mastercard.

• J.D. Power Satisfaction Rank: Not ranked

Capital One

• One of the biggest credit card issuers and could become #1 if its Discover acquisition goes through.

• Offers credit cards for nearly everyone—travel, cash back, business, and even secured cards.

• Popular cards: Venture Rewards, Venture X, Quicksilver Cash Rewards.

• J.D. Power Satisfaction Rank: #3

Chase

• One of the biggest names in credit cards, with Ultimate Rewards points that can be used for travel, cash back, and transfers to airline/hotel partners.

• Popular cards: Sapphire Preferred, Freedom Unlimited, Ink Business Preferred.

• J.D. Power Satisfaction Rank: #4

Citi

• Known for cash back and flexible rewards with ThankYou points.

• Offers some of the most popular cards for balance transfers and everyday spending.

• Popular cards: Citi Double Cash, Citi Custom Cash, Citi Strata Premier.

• J.D. Power Satisfaction Rank: #6

Discover

• No annual fees on any of its cards, plus Cashback Match, which doubles your first year’s rewards.

• Prequalification without a hard credit check is a big plus.

• Popular cards: Discover it Cash Back, Discover it Miles, Discover it Secured.

• J.D. Power Satisfaction Rank: #2

Synchrony

• Specializes in store credit cards (Lowe’s, Sam’s Club, PayPal).

• Good for financing big purchases, but some cards can only be used with specific retailers.

• J.D. Power Satisfaction Rank: Not ranked

U.S. Bank

• Not as well-known, but offers solid rewards and long intro APR periods.

• Popular cards: Cash+ Visa Signature, Altitude Go, U.S. Bank Visa Platinum.

• J.D. Power Satisfaction Rank: #8

Wells Fargo

• Late to the credit card game but now offers some of the best cash back and balance transfer cards.

• Popular cards: Active Cash, Autograph, Reflect.

• J.D. Power Satisfaction Rank: #7

How Epos Now payment services can help with credit card networks in your business

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Our service gives you detailed payment reports, helping you track transactions, manage cash flow, and make smart business decisions. Plus, with our transparent pricing, there are no surprises – just one fixed rate and no long-term contracts. Getting started is easy, and our 24/7 support team is always here to help. All our transactions are PCI compliant, keeping your business and customers safe and sound.