Definition
Visa and Mastercard are the two dominant global card payment networks, companies listed on the NYSE.
They set the rules of use, operate the authorisation and clearing networks and collect scheme fees — but they do not issue cards and do not acquire merchants directly. They rely on their members (issuing and acquiring banks), in what is known as the four-party model.
The four-party model
Each transaction involves four players: the cardholder, the issuer, the acquirer and the merchant. The network routes the messages between them and sets the rules (interchange, security, formats, disputes, chargebacks), without ever directly touching the cardholder or the merchant. Compare this with the three-party model (Amex, Discover, JCB), where the network is itself both issuer and acquirer.
Visa vs Mastercard
| Visa | Mastercard | |
|---|---|---|
| Listing | NYSE (V) | NYSE (MA) |
| Global volume | No. 1 outside China | No. 2 |
| Countries | 200+ | 210+ |
| Innovation | Visa Direct, Click to Pay | Mastercard Send, Identity Check |
| Acquisitions | Tink (2022), Plaid (aborted) | Finicity, Vocalink, Aiia |
For a merchant or a fintech, the choice often comes down to pricing or fine-grained geographic availability.
The networks' revenue
Three main sources: service fees (% of volume), data processing fees (per transaction) and cross-border fees (highly profitable on international flows). They do not collect interchange (which goes to the issuer) — a frequent confusion — but they set its rate cards, under the supervision of regulators (the IFR in the EEA, the Durbin Amendment in the US).
Network tokens
Since 2020, Visa and Mastercard have been pushing network tokens: replacing the PAN with a token specific to the merchant or wallet. Benefits: security (no more stored PANs), authorization rate (+2 to +5 points), and automatic updates when the card is reissued. Apple Pay and Google Pay use DPANs; Click to Pay (a joint initiative with Amex and Discover) replaces the card form with a single button.
What Visa / Mastercard are not
- Not banks: no customer accounts, no credit.
- Not beyond regulation: the IFR caps interchange in the EEA, the Durbin Amendment in the US; regular antitrust proceedings.
- Not alone: CB (FR), Bancontact (BE), iDEAL (NL), JCB (JP) and UnionPay (CN) are competitors in their markets.
- Not immortal: the rise of A2A (Pix, UPI, Wero) is a structural long-term threat to their model.
Within the PSD2 ecosystem
Visa and Mastercard operate the global 3DS2 Directory Servers (with CB in France), which route authentication between the merchant and the ACS. They have also become Open Banking players: Visa bought Tink, and Mastercard bought Finicity and Aiia to integrate AIS/PIS.
Real-world examples
- Issued cards: your BNP, Crédit Agricole, Boursorama, Revolut or N26 card is always a Visa or Mastercard (with or without a CB co-badge in France).
- Acceptance: near-universal in France and worldwide, except China (UnionPay) and a few markets under sanctions.
- Pricing: intra-EEA consumer interchange capped at 0.2% (debit) and 0.3% (credit), plus 0.02 to 0.05% in scheme fees; commercial cards, which are not capped, often cost 1.5 to 2.5%.
- Apple Pay: a DPAN linked to your card, with local SCA (Face ID) recognised by the issuer.
- Click to Pay: rolled out in Europe in 2023-2025, with still-slow merchant adoption.
- A2A competition: Pix (~6bn tx/month at the end of 2024, ~zero fees) illustrates the threat; Wero in Europe and FedNow/RTP in the US are pushing A2A.
- Regulation: the PSR strengthens the transparency of card fees, and the EU is considering a revision of the IFR for 2027.