how visa cards work
visa is a prominent processing network and its cards are accepted by businesses in more than 200 countries and territories around the world 2 other major payment processing networks include mastercard american express and discover 1financial institutions typically partner with a single processing network provider such as visa for all of their payment card products each issuer sets its own terms and conditions for the visa cards it offers and decides on the customers to whom it will offer them visa cards are available to individual and business customers through a range of financial institution partnerships 1visa also partners with merchants through varying types of service agreements merchants that accept visa cards pay visa inc a transaction fee each time a customer uses their visa card 1all visa cards come with a unique 16 digit number that is printed or embossed on the front along with an embedded microchip intended to provide the cardholder with additional protection against fraud there s also a magnetic stripe on the back with a panel for the cardholder s signature and a three digit validation code although they re branded with the visa name visa cards are issued by financial institutions not by visa itself types of visa cardsas noted above there are several different types of payment cards that are branded with the visa logo and that use the visa payment processing network credit cards debit cards prepaid cards and gift cards here is how each of them works visa credit cardsbanks and other financial institutions issue visa credit cards to consumers whom they deem creditworthy based on their credit report and other information like other types of credit cards visa credit cards provide cardholders with convenience and security and can be used at merchants and automated teller machines atms around the world depending on the particular card and issuer some visa cards have features such as 0 introductory annual percentage rates aprs cash back rewards and special benefits when shopping with a particular retailer all visa credit cards come with the visa zero liability policy which reduces cardholders liability for unauthorized transactions to 0 3 under federal law their liability is generally limited to 50 4visa cards can charge a range of fees again depending on the card and its issuer those may include annual fees foreign transaction fees cash advance fees balance transfer fees late payment fees and many others the interest rate on the card is determined by the issuer visa debit cardsvisa debit cards are linked to a cardholder s bank account typically a checking account like a credit card they can be used to make purchases at retailers as well as to perform routine bank transactions at a branch or through an atm 5 unlike credit cards debit cards do not extend credit but are limited to the amount of money in the cardholder s bank account as with visa credit cards visa debit cards come with the visa zero liability policy for unauthorized transactions 6visa prepaid cardsprepaid cards work like debit cards but are not associated with a bank account instead they come loaded with a specific amount of money that acts as a credit limit this means the cardholder can t spend more than the amount loaded onto the card 7 visa s prepaid cards can be used anywhere visa is accepted and can be reloaded for future use 8in addition to its all purpose prepaid cards visa has several types of specialized prepaid cards those include payroll cards rather than issuing their employees checks or making direct deposits into their bank accounts employers can pay them by regularly loading their pay onto a visa payroll card which then works like any other prepaid card 9government payment cards some states use these cards to pay monthly unemployment benefits the federal government also used them to distribute benefits as part of the coronavirus aid relief and economic security act cares act 10visa gift cardsgift cards with the visa logo are preloaded with a specific amount just like a prepaid card and may be used wherever visa is accepted the principal difference between them and prepaid cards is that gift cards can t be reloaded 11