Top Global Payment Networks - Visa

What is a payment network?

A payment network – also called a payment card network or payment processing network – facilitates digital transactions between businesses and their customers. Think Visa, Mastercard, and American Express, the three most widely used payment networks in the world and in Singapore as well. These payment networks act as a communication system through which digital transactions are accepted, authorised, verified, and approved.

Global transactions supported by major payment networks are growing steadily and stood at USD 467.65 billion in 2020, up 6% from 2019, according to the 2022 Nilson Report, a respected source on global card payment news and analysis. The same report pointed out that Visa accounted for 40% of those transactions, followed by Mastercard with 24%.

The Largest Payment Networks in Singapore

In Singapore, the big players when it comes to payment networks are Visa, MasterCard, and American Express. These are the most widely recognised networks, and they offer a range of payment options for businesses and customers alike.

Let’s break it down:

Visa

Visa is everywhere in Singapore. Whether it's a credit card, debit card, or prepaid card, you’ll find Visa widely accepted in many places. It’s known for its global reach and fast, secure payment processing. It also supports contactless payments, so your customers can make quick transactions without even swiping their cards. For your business, accepting Visa means you’re providing a popular and trusted payment option that customers are familiar with and comfortable using.

MasterCard

MasterCard is another giant in the payment world, and it’s also widely used in Singapore. Like Visa, it offers credit, debit, and prepaid cards that are accepted at a wide range of businesses. MasterCard is great for online payments, mobile wallet integration, and contactless transactions. For your business, accepting MasterCard gives you a chance to cater to a large number of customers who prefer to pay with it.

American Express (Amex)

American Express, or Amex, is a bit different. While not as universally accepted as Visa or MasterCard, Amex has a strong customer base, particularly among business professionals and frequent travellers. Amex cards are known for premium rewards programs, including travel perks and cashback options. If you cater to higher-end clients or frequent travelers, offering Amex as a payment option could help attract that audience.

These three networks—Visa, MasterCard, and American Express—are key players in Singapore’s payment scene. By accepting payments from them, you’re ensuring that your customers can easily pay in the way that’s most convenient for them, helping you streamline your transactions and grow your business.

How is a payment network different from a card issuer?

While payment networks have everything to do with credit and debit cards, including corporate cards, they might not issue the cards themselves. Visa and Mastercard don’t provide cards but allow other financial institutions – such as banks and fintech companies (like Aspire) – to issue cards with their logos.

Say you have a Visa corporate card issued by DBS Bank, such as the DBS Business Advance Debit Card. This card carries the bank’s logo on the top left corner and the Visa logo on the bottom right. This signifies that Visa is the payment network while DBS is the ‘card issuer’ or ‘issuing bank’. Likewise, in the case of Aspire’s Visa Corporate Card, Aspire is the card issuer and Visa the payment network.

A card issuer accepts and approves applications for cards and distributes the cards to customers. It extends credit to the card holder and sets the credit limit. It also sets card terms and conditions (fees, rewards, offers, and so on) and collects payments from the card holder. And, it has the final say on whether a transaction is approved or denied. Visa and Mastercard do not manage the card holder’s account in any way.

Markedly different from Visa and Mastercard, American Express provides its own cards, making it both a card issuer and payment network.

Open or Closed – Types of payment networks

From the section above, we now know that there are two types of payment networks. These go by different names. Payment networks like Visa and Mastercard, which allow other financial institutions to issue their cards and only facilitate transactions on these cards, are called ‘open networks’. On the other hand, American Express, which issues its own cards and processes transactions on them, is called a ‘closed network’.

How do payment networks work?

From the moment you swipe, tap or insert your corporate card on a point-of-sale machine or make an online payment using a mobile device, the payment network takes over and sets into motion a series of steps:

1. The card holder’s payment network receives the initial payment request.
2. It passes on the request to two parties – the card issuer/issuing bank and the bank holding the account of the business to which the payment is being made. This bank is called the ‘acquiring bank’ and it links the business receiving the payment to the payment network.
3. On receiving the request, the card issuer either approves or rejects it and communicates its decision to the payment network. If the transaction gets the green light, the card issuer transfers the funds to the acquiring bank.
4. The card issuer informs the card holder about the status of the transaction.
5. The payment network relays the card issuer’s decision to the acquiring bank, which receives the funds shortly after.
6. The acquiring bank credits the payment received in the business’ account.

What benefits do payment networks offer?

There are a number of reasons why businesses and customers alike prefer card payments, especially if they are powered by global payment networks: 

• Speed: Despite the many steps involved, card transactions on global payment networks are completed within seconds, making it a quick way for businesses and individuals to send and receive payments.
• Convenience: Payment networks empower businesses to allow their customers to pay the way they want to. Offering preferred modes of payment makes existing customers happy and attracts new ones, allowing businesses to increase sales and expand.
• Accuracy: Payment networks have built their reputation on accurate and error-free transfers. As long as businesses use up-to-date hardware and software and card holders take care of the physical condition of their cards and maintain their accounts, processing errors and inaccurate transfers are rare.
• Acceptance: While offering customers payment flexibility is important, businesses also have the freedom to pick the payment networks they want to work with. The three major global payment networks – Visa, Mastercard, and American Express – offer a similar checkout experience and have a similar acceptance rate across the world. This means that most businesses will accept and use their cards regardless of geography.
• Security: As the preference for card payments grows, so are instances of card fraud. According to Visa’s Consumer Payment Attitudes Study released this year, contactless card payment is the preferred mode of payment for 82% of Singaporeans. However, the same study also found that one in three respondents (31% of Singaporeans) had been a victim of card fraud. The reason why card payments remain popular despite the risk of theft and fraud is that payment networks, along with card issuers, are committed to ensuring the security of each transaction and regularly update their fraud prevention arrangements. Visa’s fraud detection system, Visa Advanced Authorisation, for example, uses artificial intelligence to analyse large quantities of data within seconds to look for red flags – such as if a transaction is taking place during odd hours, is for a large amount, or is not consistent with the card holder’s spending pattern. Based on the results of its study, Visa sends a risk score to the card issuer, which approves or declines the transaction. Most payment networks offer multiple security solutions such as secure metallic chips in cards, biometric payment authentication (such as fingerprint, face or iris recognition), and zero liability for victims of card fraud.

Challenges and Risks of Payment Networks for Business Owners in Singapore

Fraud and Security Threats

As a business owner, you're constantly on the lookout for ways to protect your business from cyber threats. Unfortunately, payment networks are often a target for criminals looking to exploit weaknesses. Here are some of the common risks you might face:

• Data breaches: These can expose sensitive customer information like payment details, putting both your business and your customers at risk.
• Unauthorised transactions: If criminals manage to steal payment credentials, they can use them to make fraudulent purchases on your platform.
• Chargebacks: When a customer disputes a transaction, it can lead to chargebacks, which not only cost you money but can also damage your reputation.

Luckily, payment networks are well-equipped to protect you. They use tools like encryption, tokenisation, multi-factor authentication, and fraud detection systems to safeguard your transactions, reducing the chances of financial loss for both you and your customers.

Transaction Fees

Every time you process a payment, you'll face transaction fees. These fees, charged by payment networks, can quickly add up and cut into your profits—especially if you're working with tight margins. This is an important factor to consider when choosing a payment provider. The key is finding a provider that offers value while keeping fees reasonable. Balancing cost with quality is something you'll need to keep an eye on to maintain profitability.

Regulatory Compliance

Running a business in Singapore means you need to follow a range of rules and regulations. Payment networks are subject to strict regulations around anti-money laundering (AML), counter-terrorism financing (CTF), and data privacy. As a business owner, it's your responsibility to make sure you're compliant with these laws. Not doing so can lead to fines and other serious consequences. The regulatory environment is constantly evolving, which can be tricky to keep up with, but staying on top of it will ensure that you avoid legal trouble down the line.

Operational Risks

Payment networks rely heavily on technology, and as much as we depend on tech, things can go wrong. System outages or technical failures can disrupt payments, which can create chaos for your business and frustrate your customers. This can also affect your cash flow and reputation. It's essential to make sure your payment provider has a solid track record and contingency plans in place to minimise the impact of service interruptions.

Competition and Market Saturation

The payment industry is incredibly competitive, and keeping up with the latest trends is no small feat. With new payment options like mobile wallets, blockchain, and cryptocurrencies gaining traction, traditional payment networks are having to adapt quickly. This is an important point for you as a business owner, as you need to stay ahead of the curve and choose a payment provider that will help you meet your customers' ever-changing expectations.

Understanding and addressing these risks can help you protect your business, cut costs, and provide smooth, secure payment options for your customers.

The Visa experience

As a leading global payment network, Visa, by its own admission, processes 76,000 transactions per second. It is the most widely accepted payment network in the world, favoured by millions of individuals and businesses, including Aspire. As corporate cards go, here’s what to expect from a Visa corporate card:

At a glance

• Domestic and international payment processing across more than 200 countries.
• Transactions in more than 175 currencies.
• Wide range of services including mobile, contactless, e-commerce, and personal payments.
• Wide range of products including debit, credit, corporate, prepaid, and virtual cards.

Benefits

• Ease of use is one of the main Visa corporate card benefits. Employees can pay for travel expenses (hotels, restaurants, transportation) without having to spend personal funds or ask their employers for advances or reimbursements. Similarly, businesses can make quick and easy payments to suppliers, which helps build trust and lasting relationships. Card holders receive immediate transaction alerts via text message.
• Business owners can monitor if employees are complying with company travel policies. They can also perform spend analysis – categorising spend according to expense type, for example – to streamline expense management.
• Visa also offers value-added services such as personalised rewards for card holders, advisory services (consulting and analytics), and risk and identity solutions (such as Visa Advanced Authorisation). 

Fees

• Merchant discount rate: Businesses accepting Visa card payments for sales made or services provided pay a merchant discount rate to their acquiring bank for each transaction. The merchant discount rate is a percentage of the transaction amount and ranges between 2% and 4% in Singapore. This rate is negotiated by the business and the acquiring bank and may vary depending on the type of card (debit or credit) or payment method (online payment or card swipe) used and the acquiring bank’s rates.
• Interchange fee: The merchant discount rate takes into consideration another processing fee called interchange reimbursement fee or, simply, interchange fee. This fee is made up of a percentage fee plus a fixed rate and is charged by the card issuer. Card issuers set their own interchange rates, which also vary according to the type of card and payment method used in the transaction.

Eligibility

Eligibility criteria for Visa commercial cards differ from issuer to issuer, and some are more stringent than others. Many banks such as DBS have an age (21 years and above) and annual income requirement (SGD 30,000 and above) for employees. Others, like Citibank, have a minimum net worth requirement (SGD 50,000) for companies. Fintech companies are known to have more relaxed rules for small businesses that fail to meet the eligibility criteria of major banks. For example, you can get an Aspire Visa Corporate Card simply by opening a business account with us and submitting a few documents.

Visa versus Mastercard versus American Express

As a small business in Singapore, what’s the best payment network for you? As you grapple with Visa vs Mastercard, Visa versus American Express, and Mastercard versus American Express, we’ve stacked up the three players on key parameters to see how they compare:

Now that you know what's Visa vs Mastercard vs American Express, let's look at the top Visa corporate cards in Singapore.

Top Visa corporate cards Singapore

These are some of the best Visa commercial cards in Singapore with a special focus on small businesses:

1. Aspire Visa Corporate Card

Card type: Debit, virtual, multi-currency card

Features and benefits: Real-time payment tracking, customised spend limits to control overspending, automated receipt reminders, all your transaction records in one place, and easy integration with your accounting system. Also, you can get unlimited virtual cards so that each member of your team gets their own, a feature not offered by other banks and financial institutions.

Fees and rewards: Lowest foreign exchange rates (two times lower than what banks offer), 1% cashback on digital payments, no card activation fee, zero transaction fee, no minimum balance requirement.

2. DBS Visa Platinum Business Card

Card type: Corporate credit card

Features and benefits: Spend limit based on card holder’s usage requirement, transaction record available online or via e-statement.  

Fees and rewards: SGD 194.40 annual fee, SGD 45 late payment fee, one-year fee waiver, free travel accident insurance, complimentary employee misuse coverage up to USD 25,000 per card holder and USD 1.65 million per company, cash rewards and air miles.

3. DBS Visa Business Advance Debit Card

Card type: Corporate debit card

Features and benefits: Customised spend limits, foreign currency withdrawals at overseas ATMs.

Fees and rewards: Zero annual fee, 0.3% cash rebate on transactions, free travel accident insurance, complimentary employee misuse coverage up to USD 25,000 per card holder and USD 1.65 million per company.

4. UOB Visa Platinum Business Card

Card type: Business credit card

Features and benefits: Pre-determined credit limit for each card, consolidated view of business spend, no annual income requirement.

Fees and rewards: Annual fee of SGD 181.68, SGD 20 fee for card replacement, 0.3% cash rebate on every SGD 5 charged on monthly purchases, complimentary travel insurance, e-commerce purchase protection against non-delivery and damage up to USD 200 per claim or USD 800 per annum.

5. Citi Corporate Card

Card type: Commercial card

Features and benefits: Easy single payment solution and expense tracking, contactless payments through ‘tap and pay’, can be used at 33 millions establishments worldwide for travel, entertainment, and business expenses.

Fees and rewards: SGD 150 annual fee, SGD 30,000 minimum annual income requirement for card holder, SGD 50,000 minimum company net worth requirement, free travel accident insurance, free employee misuse coverage of up to USD 25,000 per card holder and USD 1,650,000 per company, 0.3% cashback of company’s annual spend, Thank You points (one point equals SGD 1) that can be redeemed for cash rebates or rewards.

The Future of Payment Networks

Payment networks are changing quickly, thanks to new technology and shifts in what consumers want. Here's a look at some of the biggest trends shaping the future of payments.

Contactless Payments

Contactless payments, which use Near Field Communication (NFC) technology, are changing how we pay. They are quick, easy, and secure because you don't have to swipe a card physically. Contactless payments grew by 40% in 2022, showing that more and more consumers prefer this method.

Mobile Payments and Digital Wallets

Mobile phones have become an essential part of how we pay. Digital wallets, which store payment information securely, are growing in popularity. According to reports, global mobile payment volumes are expected to hit $3 trillion by 2025. This shift means that mobile payments will be even more critical for businesses and customers in the years ahead.

Open Banking and API Integration

Open banking makes it easier for third-party services to access financial data, but only with customer consent. This helps create better and more competitive financial products and services. For businesses, it opens up new ways to innovate and provides customers with the best payment options.

Central Bank Digital Currencies (CBDCs)

Central Bank Digital Currencies (CBDCs) are digital versions of national currencies. They could make payments faster, more efficient, and more inclusive. While still in the early stages, countries like China and the Bahamas are already exploring CBDCs. If this trend grows, it could change how money is exchanged worldwide.

Frequently Asked Questions

1. What is Visa?

Visa is a global payment network that connects customers, businesses, and financial institutions. It's known for facilitating electronic payments through credit, debit, and prepaid cards. Whether you’re buying something online or in person, Visa makes those transactions possible.

2. How does Visa work as a payment network?

Visa works by enabling secure payment transactions between cardholders, merchants, and their banks. When a customer uses a Visa card, the payment network verifies the transaction details and transfers the money from the cardholder’s bank to the merchant’s account, typically in seconds.

3. Is Visa a credit card company?

Visa is not a credit card company. Instead, it’s a payment network that partners with banks and other financial institutions to offer credit, debit, and prepaid cards. The credit card companies (like your bank) issue Visa cards and set the terms for your spending, while Visa handles the transaction process.

4. How many countries does Visa operate in?

Visa operates in over 200 countries and territories worldwide. This means no matter where your business or customers are, chances are, they can use a Visa card for payment.

5. What is VisaNet and Visa Direct?

• VisaNet is Visa's secure global payment network that processes and facilitates transactions between cardholders and merchants.
• Visa Direct allows businesses and consumers to send and receive payments in real time. It’s used for things like peer-to-peer transfers or for businesses to pay vendors instantly.

6. What is tokenization, and how does Visa use it?

Tokenization is a security process where sensitive card information is replaced with a unique digital token that can’t be used elsewhere. Visa uses tokenization to protect card details during transactions, making it safer for both businesses and customers.

7. What fees are associated with Visa transactions?

Visa doesn’t charge consumers for using their cards, but merchants do pay fees to accept Visa payments. These fees can vary based on factors like the type of card, the transaction volume, and the business's location. The typical fees are called merchant service fees or transaction fees.

8. Where are Visa cards accepted?

Visa cards are accepted globally—in millions of locations online and in physical stores. You’ll find Visa accepted at retailers, restaurants, online stores, and more. If a merchant accepts card payments, chances are they accept Visa.

9. What currencies can I use with a Visa card?

Visa cards can be used in most currencies worldwide. When you make a purchase in a foreign currency, Visa will handle the conversion at the current exchange rate, and your bank may charge a small fee for foreign transactions.

10. Are there restrictions on Visa’s usage in certain countries?

While Visa is widely accepted globally, there can be restrictions in certain countries due to local regulations or sanctions. Some countries or regions may limit or block Visa card usage for security or political reasons, so it’s always good to check before you travel.