You probably factor in a number of things when picking your next credit card, including the card’s travel rewards, cash-back potential, interest rates, and more. But looking at a card’s particular processing network? It’s probably not even on your radar! But which network your card is backed by — Visa, Mastercard, or American Express — has implications for where and how you can use it.
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These 3 credit card processors oversee every part of the purchase process, including approving or declining a transaction, protecting you from fraud, providing travel benefits or other protections, and finally, making sure that money flows to and from the correct accounts behind the scenes. Some networks are more widely accepted, some offer better customer service, and others might be the best choice if you have less than stellar credit.
Card Issuing
When comparing all 3 networks, there is 1 main difference between American Express and Mastercard/Visa. American Express is both a card issuer AND a payment network. Mastercard and Visa are only payment networks. So what does that mean for you?
Card Issuer
The card issuer is the one that actually extends credit to consumers. When you use your card, the card issuer pays for the transaction upfront and gets reimbursed once you pay off your bill each month.
Payment Network
A payment network processes transactions, meaning it transfers funds from the card issuer to the merchant.
Network Acceptance Rates
Another important factor to consider when comparing networks is how widely accepted it is. In short, it won’t do much good to have a credit card if it’s not accepted at the retailers you plan to visit.
Domestic
To put it simply, the more merchants that accept your card, the better the card’s network. Visa and Mastercard have traditionally been the main contenders with acceptance at 10.7 million U.S. retailers.
International
Unfortunately, American Express’s international acceptance is much lower than its competitors. For example, American Express cards are accepted in more than 160 countries worldwide, which lags behind Visa and Mastercard that are both accepted in more than 200 countries.
