Money & Finance › Payments & money movement › Credit and debit card payments: how a swipe or tap gets paid
Card networks: Visa, Mastercard, American Express, Discover
Since 1958· Institution or agency
Fact, law or dataA rule, statute, definition or measured number.
The companies that run the rails and rules connecting card issuers and merchants; Visa and Mastercard handle most US card payments.
See it on the Money & Finance map →How it works
Visa (born as BankAmericard in 1958) and Mastercard (begun in 1966 as Interbank) are 'open-loop': they do not lend or issue cards; banks do. They route approvals, settle between banks, set interchange schedules and rules such as 'honor all cards', and charge their own network fees. American Express (cards since 1958) and Discover (1985) are mostly 'closed-loop', issuing their own cards and signing merchants; Capital One bought Discover in May 2025. Mastercard went public in 2006, Visa in 2008.
Why it matters
Their rules decide what every merchant, including a landlord taking rent by card, pays and may do; that power has drawn two decades of antitrust litigation.
Facts, rules and data
Company 10-K filings, network rulebooks, the Nilson Report, the merchant interchange litigation begun in 2005, and the Justice Department's 2024 debit monopolization suit against Visa.
Debates and risks
Whether the November 2025 merchant settlement, preliminarily approved in June 2026, will meaningfully lower fees or entrench the networks is disputed.
Inside this (1)
Connections (5)
▸Card networks: Visa, Mastercard, American Express, Discover route and set rules for Credit and debit card payments: how a swipe or tap gets paidFact, law or data
The connection
Every card payment passes through a network that relays the approval request from the merchant's bank to the card issuer, then clears and settles the day's transactions between them. The network writes the rules on fees, chargebacks, data security and which cards merchants must accept.
When and why
Worldwide; Visa and Mastercard carry most US card volume, with American Express and Discover the rest.
How we know
Network rulebooks, published interchange tables and the Nilson Report's market-share data.
Debates and risks
Whether rules like 'honor all cards' protect the system or block competition is central to the fight over the 2025 merchant settlement.
▸BankAmericard: the 1958 Fresno launch that became Visa grew into Visa, the largest of Card networks: Visa, Mastercard, American Express, DiscoverFact, law or data
The connection
To grow beyond California, Bank of America licensed BankAmericard to other banks from 1966. Quarrels among licensees led them to form a member-owned company, National BankAmericard Inc., in 1970 under Dee Hock; it was renamed Visa in 1976. Rival banks formed the Interbank Card Association in 1966, which became Mastercard.
When and why
San Francisco and Seattle bankers, 1966–1976; Visa became a public company in its March 2008 stock offering.
How we know
Visa corporate histories, Dee Hock's memoir 'One from Many' (2005), and Visa Inc.'s SEC filings.
Debates and risks
Whether the member-owned model Hock designed, or later corporate ownership, best explains Visa's dominance is a matter of interpretation.
▸Interchange 'swipe' fees merchants pay on card sales are set by Card networks: Visa, Mastercard, American Express, DiscoverFact, law or data
The connection
Visa and Mastercard publish interchange schedules, hundreds of rates by card type, merchant category and whether the card was present, typically updated in April and October. The fee flows from the merchant's bank to the issuer; the network sets it but keeps only its own separate fee.
When and why
In US card markets since the 1970s; the merchants' antitrust case over these rates began in 2005.
How we know
Published interchange rate tables and filings in In re Payment Card Interchange Fee litigation (E.D.N.Y.).
Debates and risks
Whether the November 2025 settlement, cutting average credit rates by 0.10 percentage point for five years, will meaningfully change merchants' costs is disputed.
▸Mobile wallets and tap-to-pay: Apple Pay and Google Pay store card tokens issued by Card networks: Visa, Mastercard, American Express, DiscoverFact, law or data
The connection
When a card is added to Apple Pay or Google Pay, the network's token service, Visa Token Service or Mastercard's MDES, replaces the card number with a device token and keeps the link. Each payment then runs on the same network, with a one-time cryptogram proving it came from that phone.
When and why
Launched with Apple Pay in October 2014, built on EMVCo's payment-token standard.
How we know
Visa and Mastercard token-service documentation and EMVCo's published tokenization framework.
Debates and risks
Whether networks' control of tokens mainly strengthens security or entrenches them against new payment rails is debated.
▸The digital euro (ECB project, earliest about 2029) is meant to cut reliance on US Card networks: Visa, Mastercard, American Express, DiscoverFact, law or data
The connection
Non-European firms, mainly Visa and Mastercard, process close to two-thirds of euro-area card payments, and several euro countries have no domestic card scheme. A digital euro accepted everywhere in the euro area would give merchants and banks a European rail, cutting fees and dependence on US companies.
When and why
An ECB argument since 2023, stressed by President Christine Lagarde; banks' own Wero wallet competes for the same role.
How we know
ECB payment statistics and speeches; the two-thirds share is the ECB's own figure.
Debates and risks
Whether merchants will adopt it, and whether private European options like Wero make it unnecessary.