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Question about credit card perks and payment networks

Blogger

Question about credit card perks and payment networks

So I always thought of CC benefits such as travel insurance and purchase protection as being covered by the payment network, not by the issuer. For example, a Visa card issued by Citi will offer standard Visa benefits, and a Mastercard World Elite issued by Chase will offer standard Mastercard World Elite benefits. Not sure if this applies to American Express and Discover, but I have been able to look up a Visa or Mastercard CC's benefits on www.benefitinformationcenter.com until ... I tried my friend's Crap One card. The system doesn't recognize his card, which probably means that his card doesn't offer what I've been calling the standard benefits, though it's a Visa.

 

So is my theory correct that CC's benefits are provided by the payment network as opposed to the issuer, at least in the case of Visa and Mastercard? If my theory is valid, what could be the reason my friend's CC doesn't offer such benefits?

 


Inquiring minds want to know.

Message 1 of 6
5 REPLIES
Valued Contributor

Re: Question about credit card perks and payment networks

It depends on the credit card issuer. Some issuers will let payment network handle the insurance part, while others will provide on their own.

 

Example, Chase handles purchase protection and extended warranty through a third party insurance company, not Visa or MasterCard.

Message 2 of 6
Blogger

Re: Question about credit card perks and payment networks

So I guess the issuer has the option of removing the perks from the card as well, as in the case of my friend's Crap One?

Message 3 of 6
Valued Contributor

Re: Question about credit card perks and payment networks


HiLine wrote:

So I guess the issuer has the option of removing the perks from the card as well, as in the case of my friend's Crap One?


Correct. For example Visa has its own in house reward program called Visa Extras (the program sucks anyway, as points value can be as low as 0.1 cent per point). Obviously most issuing bank decided to offer reward program of their own.

 

Issuing bank ultimately decides what to offer and who to offer.

Message 4 of 6
Blogger

Re: Question about credit card perks and payment networks

You actually work in the business don't you? Thank you for the insight! Smiley Happy

 

Sorry that induced me to ask more questions... Smiley Happy 

 

Do card issuers pay for the perks that the payment networks provide? If they do, that means they actually lose money on cards without an annual fee that are not being used? When you call the customer service number on the back of the card to make use of the perks, do you deal with the issuer or the payment network, assuming it is the payment network, say Mastercard, that provides the perks?

Message 5 of 6
Valued Contributor

Re: Question about credit card perks and payment networks


HiLine wrote:

Do card issuers pay for the perks that the payment networks provide? If they do, that means they actually lose money on cards without an annual fee that are not being used? When you call the customer service number on the back of the card to make use of the perks, do you deal with the issuer or the payment network, assuming it is the payment network, say Mastercard, that provides the perks?


That's something between the bank and the payment network. Payment network collects the swipe fee and splits a portion of it to the bank. Bank gets to keep the interest charge.

 

The number on the back of your card is always to the bank. Bank will simply give you another number if it is served by the payment network.

Message 6 of 6