The Payment Chain Behind Every Card Transaction

What Is the “Card Payment Chain”?

When you pay with a credit card, several organizations cooperate to move information and money. Together they form the card payment chain. At a high level it includes:

• you, the cardholder,
• the merchant and their payment terminal or checkout,
• the merchant’s acquirer and payment gateway/processor,
• the card network (e.g. Visa, Mastercard, Amex), and
• your issuer (the bank or provider behind the card account).

Each link in the chain adds something: connectivity, risk checks, routing, compliance and settlement. They also each take a slice of the merchant fee, which is why understanding the chain matters to both merchants and issuers.

The Main Actors in the Chain

Different players have distinct roles and economics:

• Merchant: accepts card payments and pays a fee on each transaction. Wants reliability, low costs and quick settlement.
• Acquirer: the merchant’s bank or payment provider. Onboards merchants, manages risk and connects to the networks.
• Payment gateway / processor: provides the technical connection between the merchant’s checkout and the acquirer/network, handling encryption and routing.
• Card network: defines rules, formats, fees and runs the scheme that links issuers and acquirers globally.
• Issuer: provides the card, extends credit and decides whether to approve or decline each authorization.

Some companies combine several roles (for example, a provider acting as both gateway and acquirer). Others specialize in one layer of the chain only.

From Tap to Settlement: How the Chain Flows

A standard credit-card transaction typically moves through three stages:

1. Authorization: when you tap or insert the card, the terminal sends an encrypted request through the gateway to the acquirer, across the network and to the issuer. The issuer checks available credit, fraud signals and rules, then returns approve/decline.
2. Clearing: approved transactions are later sent in batches from acquirers to networks and onward to issuers with more complete data, ready for posting on statements.
3. Settlement: money moves between institutions (often via the network) so that issuers reimburse acquirers, and acquirers pay merchants minus agreed fees.

This flow usually completes in one to two business days, although the cardholder may only see it as a cleared transaction on their statement.

Where Fees Live in the Chain

The price a merchant pays per transaction is typically broken into:

• Interchange: goes to the issuer, meant to cover credit risk, fraud and account servicing.
• Scheme/network fees: go to the card network for operating the rails and running rule frameworks.
• Acquirer margin and processing fees: cover the acquirer’s own risk, support, and any gateway/technology services.

Different card types and regions have different fee caps, rules and negotiation options, which is why the same chain can be more or less expensive depending on where and how you accept cards.

Risk, Security & Compliance Along the Chain

Every link in the chain has obligations:

• Data security: card data must be handled according to scheme rules and standards like PCI DSS.
• Fraud monitoring: issuers, acquirers and processors all run fraud models and monitoring to detect unusual patterns.
• Compliance & KYC: customer and merchant onboarding are subject to local regulations, sanctions rules and network policies.

Modern stacks use tokenization, 3-D Secure, risk-based authentication and network tokens to make this chain more secure without adding too much friction to each purchase.

Card Payment Chain – At a Glance

For a broader look at how card technology, virtual cards, wallets and crypto-linked rails fit in, visit the Technology & Payments hub on Choose.Creditcard .

Explore Related Payment-Rail & Technology Topics

Part of The CreditCard Collection

Chain.Creditcard is part of The CreditCard Collection — a network of focused minisites operated by ronarn AS. Each page explains one aspect of card usage or payment infrastructure, then connects you to neutral comparison and knowledge hubs.

This site is informational only. It does not provide financial advice, legal advice or recommendations for specific acquirers, processors or networks. Always consult official documentation and your own advisors before choosing providers.

Want to See How Technology Shapes Card Products?

Use Chain.Creditcard to understand the invisible rails behind your card. Then, head over to the Technology & Payments hub on Choose.Creditcard to explore how virtual cards, wallets, tap-to-pay and crypto integrations build on the same underlying chain.