The Case for Card Networks’ Embrace of Interoperability

Card networks are at a crossroads after decades of dominance. New payment methods and heightened regulatory scrutiny are eroding the competitive advantage Visa, Mastercard, American Express, and Discover have historically enjoyed. This combination of factors increases threats to the interchange model that has been around almost as long as card networks themselves.

As the payments ecosystem decouples, networks should consider something that once might have been unthinkable: They should increase collaboration with fintechs. Services like inventory management or fraud mitigation will become the payment battleground as rails are increasingly commoditized. Under the new dynamic, networks will directly compete with fintechs in some areas while collaborating in others. 

Key questions discussed in this report:

• How are card networks’ legacy positions being challenged by fintechs and other upstarts?
• How can card networks embrace interoperability to navigate a tougher environment?
• What are the challenges standing between card networks and greater interoperability with competitors?

Companies Mentioned:

American Express, Discover, Marqeta, Mastercard, Visa, Zeta