What is a card scheme? How Visa and Mastercard work
By SendPay Business · · 2 min read
A card scheme is the network that connects card payments between banks. Visa and Mastercard are the biggest. They don't issue cards or lend money themselves: they set the rules and run the network that lets a card from one bank work at a shop that banks somewhere else.
The four parties
The scheme sits in the middle, passing messages and money between the issuer and the acquirer.
- The cardholder, who pays with the card.
- The card issuer, which provides the card and approves payments.
- The merchant, which accepts the card.
- The acquirer, which processes card payments for the merchant.
How schemes make money
Schemes charge fees to issuers and acquirers for using the network. These are separate from interchange fees, which are paid from the acquirer to the issuer on each payment.
How new card programmes join
Most new card brands don't join a scheme directly. They work with a licensed issuer or BIN sponsor that is already a scheme member, which is much faster than becoming a member yourself.
Where SendPay fits
SendPay's Card Issuing Platform lets you issue branded cards to your customers through licensed partners. SendPay tells you in writing which licences apply to your platform before you pay.
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What is an interchange fee?
The fee paid to the card issuer on each payment.
What is an interchange fee? →Read next
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.