There are four major credit card networks: American Express, Visa, Mastercard, and Doscover. Each network decides where debit and credit cards can be used. In addition to these networks, two credit card networks (Discover and American Express) also issue credit cards to consumers. For example, a credit card issued by American Express or Discover will use the AmEx or Discover network, but cards on the Mastercard or Visa network may be issued by a company such as Bank of America or Capital One, not Mastercard or Visa.
It’s important to understand that each network has a very different market share, but market share isn’t the whole picture. Eat network also has a different annual spending volume, which is important to consider when choosing a credit card processing company.
Which Card Network is Most Popular?
Visa boasts the largest market share with 48.8% of the market, acceptance in more than 200 countries, and 8 million merchants in the U.S. that accept it. Mastercard is the second-most popular card network with 31.3% of the market share, acceptance in more than 210 countries, and 8 million U.S. merchants. While American Express is more widely accepted internationally, Discover has a higher U.S. acceptance rate with 7 million merchants and 10.7% of the market share.
Card Networks and Merchant Accounts
Merchants can choose with credit cards they can accept by comparing merchant accounts and fees. Fees are the biggest factor to consider in this decision. Visa and Mastercard are the most widely used and accepted cards. In terms of credit card processing, both have low per-transaction fees that are charged to vendors.
Discover is accepted less frequently. Discover does not partner with banks to provide consumers with debit and credit cards, and the network charges a higher per-transaction fee to merchants. Discover cardholders also tend to have a lower monthly spending volume than Mastercard and Discover.
While network popularity is an important consideration, merchants should keep in mind that each network has a different average monthly spending volume. For example, while American Express is the smallest of the four networks, AmEx cardholders spend an average of $99.70 per month, compared to just $262.20 among Mastercard cardholders and $315.50 among Visa cardholders. This should be weighed against the higher transaction fees when accepting American Express and Discover cards.