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What do Visa and Mastercard do? An intro to card networks

2026-09-08 | original

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Why This Matters

A plain-language explainer that untangles who actually does what in a card payment, clarifying that Visa and Mastercard are networks rather than banks, issuers, processors, or hardware makers. That distinction matters because the payments stack is where fees, partnerships, and fintech competition all live, and misunderstanding it obscures who controls what in everyday commerce.

Key Takeaways

Visa and Mastercard are card networks that connect issuers/cardholders with acquirers/merchants — they don't issue cards, run banks, or make terminals.
The card ecosystem splits into an issuing side (bank, cardholder) and an acquiring side (merchant acquirer, merchant), forming a two-sided market.
Merchant onboarding and underwriting traditionally sat with banks but is increasingly handled by modern processors like Stripe, Square, and Adyen.

Worth a Look

Square Reader for Contactless and Chip — The article explains how card networks like Visa and Mastercard sit between merchants and banks, with processors like Square handling the actual checkout. This pocket-sized Square reader lets a small business or side hustle accept tap and chip card payments right from a phone or tablet, making the whole payments chain tangible.

See Square Reader for Contactless and Chip on Amazon → Affiliate link — we may earn a commission on purchases, at no extra cost to you. Product picked by AI based on this article; it is not a tested recommendation.

Most people can recognize the Visa and Mastercard brands. Chances are, you use one of their cards to transact every day. You may have some notion that most places (in the US) take both, but some places only take Visa (e.g. Costco), and vice versa.

So what do they do? Here’s Visa’s attempt to answer that question.

A few things they don’t do:

They aren’t the company that issues the card. Those are called card issuers .

. They aren’t a bank, though the cards you have are probably issued by one (Chase, Capital One, BofA, etc).

They don’t distribute point of sale methods or online checkouts, which are done by payment processors .

. They aren’t responsible for onboarding or underwriting stores and merchants, known as merchant acquiring . This is done by banks offering merchant accounts, but increasingly offered by modern payment processors (Stripe, Square, Adyen) .

. This is done by banks offering merchant accounts, but increasingly offered by modern payment processors (Stripe, Square, Adyen) . They don’t manufacture or print cards.

Nor do they manufacture the point of sale hardware.

Instead, Visa and Mastercard are card networks, facilitating card transactions by connecting the cardholders and issuers to the merchants and acquirers.

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