What is a scheme?
A scheme (a card payment system or network) is the organization that provides the framework that lets issuers and acquirers interoperate. In the four-party model, it issues no cards and signs up no merchants: its members do both. Three functions define it: a set of rules binding on its members, a technical infrastructure for routing and clearing, and a licensing system that controls who can issue and acquire under its brand.
- Rules: acceptance conditions, security requirements (EMV, and PCI DSS through the PCI SSC), dispute and chargeback rules (reason codes, time limits, arbitration), and brand requirements (logo display).
- Routing: authorization switches route each message to the right issuer based on the BIN, with availability requirements close to 99.99%.
- Clearing and settlement: calculating net positions, applying interchange automatically, and sending settlement instructions to settlement banks.
- Licenses: an issuing license (the right to put cards bearing the brand into circulation) and an acquiring license (the right to sign up merchants), held either as a principal member or as an affiliate sponsored by a principal.
- Shared innovation: network tokenization (VTS at Visa, MDES at Mastercard), 3-D Secure, contactless standards, and Click to Pay.
CB: France’s domestic scheme
The GIE Cartes Bancaires (CB) is France’s domestic card scheme, created in 1984 by the country’s major banks. It is one of the strongest domestic schemes in the world. It was built on the principle of full interbank interoperability: any CB card works at any CB merchant, whatever the issuing bank. As a result, France built a single national network, while other countries kept fragmented systems.
- Member-run governance: CB is an economic interest grouping (GIE) run by its members: the traditional banks and, since the market was opened by regulation, payment institutions and e-money institutions. It does not seek profit for itself: rules and pricing are set collectively (under the oversight of the Autorité de la concurrence).
- Near-universal co-badging: almost every CB card also carries an international brand (Visa or Mastercard). In France, transactions are routed to CB by default; abroad, they go over the international network.
- Low interchange: under pressure from the Autorité de la concurrence (2011 commitments that cut the fee to 0.28%) and then from the IFR, CB interchange is among the lowest in Europe, a structural cost advantage for French merchants.
- Infrastructure: authorizations over the CB network, clearing through CORE(FR) operated by STET; a long-standing pioneer in security (France rolled out chip and PIN nationwide in the early 1990s, ahead of the rest of the world).
Visa and Mastercard: the global networks
Visa and Mastercard are two global schemes that grew out of bank associations: BankAmericard in 1958 for Visa, and Interbank/Master Charge in 1966 for Mastercard. Both later went public, Mastercard in 2006 and Visa in 2008. Visa Europe, which had remained a bank-owned cooperative, was acquired by Visa Inc. in 2016 for about €21 billion. This shift from a member-owned to a shareholder-owned model partly explains why scheme fees have kept rising over the past 15 years.
| Visa | Mastercard | |
|---|---|---|
| Cards in circulation | ≈ 4.5 billion | ≈ 3.5 billion |
| Model | Public company (NYSE), formerly a bank association | Public company (NYSE), formerly a bank association |
| Debit brands | Visa Debit, V PAY (being phased out) | Debit Mastercard, Maestro (phased out since 2023) |
| Network tokenization | VTS (Visa Token Service) | MDES (Mastercard Digital Enablement Service) |
| Fraud monitoring programs | VAMP (Visa Acquirer Monitoring Program) | ECP (Excessive Chargeback Program) |
- Licenses: issuers and acquirers need a license for each territory and each activity. A principal member deals directly with the scheme and settles in its own name; an affiliate/associate operates under a principal’s sponsorship.
- Fees: assessments (in basis points on volume), per-transaction processing fees, optional fees (tokenization, data, fraud services), and a whole arsenal of behavior-based fees (poor data quality, excessive representment rates, and so on).
- De facto standard setters: their rules (published, several hundred pages each) and timelines (3DS cutover dates, the Maestro sunset, the 8-digit BIN migration in 2022) apply to the entire global ecosystem.
Amex, Diners, JCB, UnionPay: the other models
Several networks coexist with Visa and Mastercard under different models. American Express, focused on the premium segment and business travel, and Diners Club, a 1950 pioneer now part of Discover, operate as three-party closed loops, sometimes combined with local licensing. JCB in Japan and UnionPay in China, the world’s largest network by number of cards, are four-party schemes. Both are deeply entrenched at home, and their international acceptance is concentrated along tourist corridors.
| Network | Model | When to accept it | Indicative merchant cost |
|---|---|---|---|
| American Express | Three-party (hybrid through licensees) | Business, travel, premium customers | 1.5% to 3% |
| UnionPay | Four-party (China) | Tourist areas, luxury, duty-free | Varies; dedicated acquiring agreements |
| JCB | Four-party (Japan) | Japanese and Asian tourists | Often through agreements with European acquirers |
| Discover/Diners | Three-party with a network of alliances | Marginal in France | Varies |
Europe’s domestic schemes
A domestic scheme is a national card network whose rules and governance are controlled by the banks of a single country. Several European countries still have one, almost always co-badged with Visa or Mastercard for international transactions. These systems share the same strengths: low costs, local governance, and a close fit with the national market. They also share the same weakness: dependence on co-badging and underinvestment in e-commerce.
| Scheme | Country | Domestic position | Distinctive feature |
|---|---|---|---|
| Cartes Bancaires (CB) | France | Default network for almost all payment cards | Full interbank interoperability since 1984; open to PIs and EMIs |
| girocard | Germany | ≈ 100 million cards; dominant in stores | Long absent from e-commerce; the traditional Maestro co-badge was replaced after Maestro’s withdrawal |
| Bancontact | Belgium | Majority of Belgian card payments | Merged with Payconiq (mobile app); very high uptake of domestic mobile payments |
| Dankort | Denmark | Long-standing national scheme | Co-badged Visa/Dankort; facing head-on competition from mobile (MobilePay) |
| Pagobancomat | Italy | Domestic debit network | Runs on the Bancomat network; digital expansion projects underway |
| Multibanco | Portugal | National network (cards plus a very dense ATM network) | Services beyond payments (bill payments, MB references) |
EPI and Wero: Europe’s bid
The European Payments Initiative (EPI) is a project for a pan-European payment network, launched in 2020 by 16 major banks from France, Germany, Belgium, the Netherlands, and Spain. It has political backing from the ECB and the European Commission. The card component was dropped in 2022, for lack of consensus among members and because of the cost of replacing domestic schemes. EPI then shifted to Wero, an account-to-account payment wallet built on SEPA Instant Credit Transfer.
- Model: Wero is not a card. No card interchange, no Visa or Mastercard in the loop. Settlement is an SCT Inst between bank accounts, while EPI runs the scheme layer (rules, directory, dispute resolution).
- Distribution through banks: Wero is built into the banking apps of its shareholder banks (and is also available as a standalone app), a decisive enrollment advantage over fintechs.
- Challenges: building merchant acceptance against universally accepted cards, creating economics that work for banks (instant settlement carries no interchange), and holding its own against Apple Pay and PayPal on user experience.
- Favorable backdrop: the EU Instant Payments Regulation (2024) makes the underlying rail universal, at a price no higher than a standard transfer. The infrastructure Wero runs on is now a legal requirement for every bank.