Card Networks
Your processor moves money. Card networks make the rules. When you breach a chargeback threshold, it's the network (Visa, Mastercard) that fines you, not your processor. Understanding who controls what prevents wasted effort fighting the wrong entity.
On this page
The Four Major Networks
- Market share: ~50% US, ~40% global
- Chargeback threshold: 0.9% + 100/month
- Response window: 30 days
- Type: Open-loop network
- Market share: ~25% US, ~35% global
- Chargeback threshold: 1.0% + 100/month
- Response window: 45 days
- Type: Open-loop network
- Market share: ~15-20% US, ~10% global
- Chargeback threshold: ~1-1.5% (unpublished)
- Response window: 20 days
- Type: Closed-loop network
- Market share: ~7-10% US, under 1% global
- Chargeback threshold: ~1.0% (unpublished)
- Response window: 20-30 days
- Type: Closed-loop network
Open-Loop vs Closed-Loop
Open-Loop (Visa, Mastercard)
Characteristics:
- Network is separate from issuers and acquirers
- Many banks issue Visa/Mastercard cards
- Competition among issuers
- Network sets rules but doesn't compete
Closed-Loop (Amex, Discover)
Characteristics:
- One company does everything
- Issues own cards (mostly)
- Operates the network
- Often handles acquiring
- More control, less competition
What this means for merchants:
- Open-loop: Rules are negotiated between many parties
- Closed-loop: One company makes all decisions
Network Comparison for Merchants
| Factor | Visa | Mastercard | Amex | Discover |
|---|---|---|---|---|
| Chargeback threshold | 0.9% (strict) | 1.0% (moderate) | ~1.5% (lenient) | ~1.0% (moderate) |
| Monitoring programs | VDMP, VAMP | ECM, HECM | Internal | Internal |
| Response window | 30 days | 45 days | 20 days | 20-30 days |
| Reason code format | 2-digit (10.4) | 4-digit (4837) | Letter (F29) | Letter (UA02) |
| Win rate (typical) | 40-50% | 40-50% | 30-40% | 30-40% |
| Fees | 0.14% | 0.1375% | Higher | 0.13% |
| International presence | High | High | Medium | Low |
Strictest to most lenient: Visa → Mastercard → Discover/Amex
Which Network Matters Most?
By Volume (Your Processor Reports This)
Typical US merchant transaction mix:
- Visa: 50-55%
- Mastercard: 25-30%
- Amex: 10-15%
- Discover: 5-10%
Where to focus:
- Monitor Visa first (most volume, strictest thresholds)
- Monitor Mastercard second (second most volume)
- Amex and Discover rarely breach (low volume, higher thresholds)
By International
If you're selling internationally:
- Visa: Dominant globally
- Mastercard: Strong in EU, LATAM, Asia
- Amex: US and premium segments only
- Discover: Irrelevant internationally
International merchants: Visa + Mastercard = 95%+ of your international volume.
How to Work With Networks (Hint: You Don't)
You never contact networks directly. Everything goes through your processor:
| Want to... | Who You Contact |
|---|---|
| Dispute a chargeback | Your processor |
| Ask about monitoring programs | Your processor |
| Request threshold exception | Your processor (they ask network) |
| Report fraud cluster | Your processor |
| File for arbitration | Your processor |
Networks work B2B (bank-to-bank). Merchants are excluded from direct communication.
Exception: MATCH list inquiries - you can request your MATCH status through specific channels, but removal requests go through original listing processor.
Network-Specific Strategies
Visa: Most Strict, Most Important
Strategy:
- Monitor Visa ratio weekly (0.9% threshold is low)
- Implement CE 3.0 for Visa fraud disputes
- Set internal alarm at 0.65% (VDMP early warning)
- Respond to Visa disputes within 15 days (even though you have 30)
Priority: Highest - Visa breaches hurt most
Mastercard: More Forgiving
Strategy:
- Monitor Mastercard separately (1.0% threshold)
- Watch for "prior month" calculation quirks
- Use full 45-day window if needed
- Implement Ethoca alerts (Mastercard-owned)
Priority: High - second most volume
Amex: Inquiry-Focused
Strategy:
- Respond to inquiries within 48 hours (prevents chargebacks)
- Accept that win rates are lower (30-40%)
- Use same evidence as Visa/MC
- Track 20-day deadlines carefully
Priority: Medium - lower volume, higher AOV
Discover: Low Volume, Low Risk
Strategy:
- Treat like Visa/MC disputes (same evidence)
- Don't forget 20-30 day windows
- Low volume = rarely breach thresholds
Priority: Low - unless Discover is unusually high % for you
Test to Run
Multi-network monitoring setup:
Week 1: Build tracking
- Create spreadsheet with columns:
- Total disputes this month
- Visa disputes | Visa ratio
- MC disputes | MC ratio
- Amex disputes | Amex ratio
- Discover disputes | Discover ratio
Week 2: Set thresholds 2. Add threshold rows:
- Visa: 0.9%
- Mastercard: 1.0%
- Amex: 1.5% (estimate)
- Discover: 1.0% (estimate)
Week 3: Alert system 3. Calculate distance to threshold for each network 4. Set alerts at:
- Visa: 0.65% (VDMP)
- Mastercard: 0.75%
- Amex: 1.0%
- Discover: 0.75%
Success criteria: Weekly monitoring across all four networks, alerts before breaching.
Scale Callouts
Under $100K/month:
- Track total ratio (all networks combined)
- Don't split by network yet (volume too low)
- Unlikely to breach count thresholds
$100K-$500K/month:
- Start tracking Visa and Mastercard separately
- Can breach count thresholds (100/month)
- Amex/Discover still low priority
$500K-$1M/month:
- Track all four networks separately
- Visa ratio is your biggest risk
- Implement network-specific alerts
Over $1M/month:
- Dedicated monitoring per network
- Network-specific prevention strategies
- Consider chargeback guarantee services
Where This Breaks
-
Digital wallet confusion: Apple Pay/Google Pay transactions can be any network. Check your statements to see which network is actually used.
-
Network rules change: Visa and Mastercard update rules quarterly. Your processor should inform you, but they don't always.
-
Processor errors in reporting: Your processor reports your ratios to networks. If they make mistakes, you suffer. Verify their math.
-
Multi-processor complexity: If you have multiple processors, each reports separately. You need to aggregate across processors yourself.
-
International vs domestic rules: Networks have different rules for cross-border transactions. Research before expanding.
Next Steps
New to network rules?
- Read Payment Ecosystem first
- Understand who does what
- Then dive into individual network pages
Monitoring chargeback ratios?
- Chargeback Monitoring Thresholds - All programs
- Zero Point Nine Panic - Crisis response
- Network Programs Reference - Full details
Dealing with network fines?
- MATCH/TMF List - Termination database
- Reduce Chargebacks Fast - Emergency playbook
- Chargeback Prevention - Long-term strategy
See Also
- Payment Ecosystem - Understanding the four-party model
- Chargeback Monitoring - VAMP, ECM, other programs
- MATCH/TMF List - Network termination lists
- Reason Codes - All network codes
- Processor Management - Working through processors
- Network Programs - Detailed program specs