Visa is one of four major credit card networks in the United States, along with MasterCard, Discover, and American Express. The company creates credit card products that banks and financial institutions can offer to consumers and facilitates transactions made with those cards. Learn more about Visa credit cards and how, as a driver of payment technology, Visa has played a major role in the way credit cards are used.
Definition and Example of Visa Credit Cards
Visa credit cards allow consumers and businesses to make credit purchases that rely on the Visa network for processing. Visa itself doesn’t provide credit or issue credit cards. Instead, the global company operates a network that facilitates money movement between consumers and businesses.
How Do Visa Credit Cards Work?
Visa doesn’t process credit card applications or provide credit to cardholders. Instead, Visa offers credit card products to banks and credit card issuers—financial institution clients, co-brand partners, fintechs, and affinity partners—that qualify and approve individual cardholders. Those financial institutions collect payments and decide pricing based on Visa’s product and service rules. Once approved, cardholders can use their credit card to make purchases with over 100 million business locations that accept Visa in over 200 countries and territories across the world. Traditionally, transactions made with Visa credit cards, like many others, were made by swiping the credit card through a card reader or by manually keying credit card information. Today, cardholders can use their Visa credit card in a variety of ways including tapping their card on a card reader or storing it in a mobile or digital wallet. Most Visa credit card transactions involve five key players: the account holder, card issuer, merchant, acquirer (the merchant’s bank), and Visa. Here’s an overview of how Visa transactions work.
First, the consumer makes a purchase from a business, which presents the transactions to the acquirer.The acquirer presents the transaction to Visa, which then presents it to the card issuer to authorize the transaction.The card issuer pays the acquirer the value of the transaction minus an interchange fee and posts the transaction to the cardholder’s account.The acquirer pays the merchant the amount of the purchase minus the discount rate.
Types of Visa Credit Cards
There are three tiers of Visa credit cards—Traditional, Signature, and Infinite—each with different levels of benefits. Visa makes these benefits available for card issuers to include in their programs, but each card issuer ultimately decides which benefits to offer with specific Visa credit cards. Credit card issuers define the qualification criteria like credit score, income, and level of debt for the Visa credit cards they issue. Generally, you’ll need a higher credit score to qualify for higher-tier credit cards.
