Credit card issuers vs. payment network
No matter what form of credit card you’re looking for, it’s important to be aware of the credit card firms that are involved. As a cardholder, you’ll want to know both the credit card network and the credit card issuer that’s affiliated with your card.
The credit card network assists you in the processing of your credit card transactions. When you swipe your card, the network is responsible for transmitting the transaction information from the merchant to your bank (and back). There are four main networks in the United States:
The network will determine where you may use your credit card. For example, if you have a Visa card, you can only use it at businesses that accept Visa. Every credit card is linked to a single network.
The credit card issuer is the bank that provides financial backing for the credit limit on your credit card. . You will be invoiced by and will make your payments directly to the issuer.
A large number of credit cards will be issued by a variety of different companies and networks. Visa and Mastercard have partnered with hundreds of banks. Discover and American Express, on the other hand, serve as both an issuer and a network.
The largest credit card providers in the United States
Credit cards may technically be issued by any bank or credit union, and this is most often what happens. However, the ordinary credit card user in the United States is more likely to hold a card from a multinational bank than from a small bank down the street.
According to the Nilson Report, the top credit card issuers in the United States control more than 80% of the market share. In other words, about 8 out of 10 credit cards in the United States are issued by one of the following issuers:
If you’ve ever wondered why the same banks appear on every “Best of” list, here is the answer. They really do constitute the great majority of credit card alternatives — particularly the high-end rewards cards that have become so popular.
Given the enormous influence these financial institutions have on the credit card industry, it is a good idea to get to know them a little better. Taking a deeper look at each firm,
American Express is a credit card company that operates in the United States (American Express Co.)
American Express, sometimes known as Amex, has been in operation since 1850. It didn’t join the payment card industry until the 1950s when it created its first charge card. The first American Express credit card was issued almost 30 years later. Amex operates as both an issuer and a network for its cards.
According to the 2020 Nilson Report, American Express is now the second-largest card issuer in the United States in terms of purchase volume. It also ranks among the top six card issuers in terms of the number of cards in circulation.
Bank of America is a financial institution (Bank of America Corp.)
The Bank of America, abbreviated BoA, was first established in San Francisco in the early 1900s as the Bank of Italy. It wasn’t until 1930 that it was renamed the Bank of America. The original Bank of America credit card, known as the BankAmericard, was issued in 1958 and was one of the first consumer credit cards issued.
Based on the number of cards issued, Bank of America is among the top five issuers. It is also the fourth-largest issuer in terms of percentage of total buy volume.
Barclays is a financial institution (Barclays Bank Delaware)
Barclays is primarily recognized as a British bank, but it also maintains a presence in the United States via Barclays Bank of Delaware. In the 1960s, Barclays was responsible for introducing the world’s first consumer credit card in the United Kingdom. However, it did not begin issuing cards in the United States until almost 50 years later.
When it comes to total cards in circulation (in the United States), Barclays ranks 10th, accounting for around 3 percent of the entire market share. It’s also towards the bottom of the list in terms of sales volume. The bank used to offer a few cards under the name Barclaycard, but it currently mostly concentrates on cobranded travel and retail cards.