Visa is a key global player in the payment processing sector, and is used by everyone from small retail businesses to large multinational corporations. Visa processed 233.8 billion transactions globally in 2024.

Despite its popularity, Visa has limitations, particularly in regions where local payment methods are popular. Its offerings are also often tailored to the needs of larger organizations, rather than small businesses and startups. For businesses with specialized compliance needs, Visa’s security capabilities might not align with regulatory requirements.

Businesses that want to know how to use Visa and the implications of Visa payment processing first need to understand Visa’s products and presence in various global markets. This includes learning about which types of businesses and customers Visa can best serve.

Below, we’ll cover where and how Visa operates, whom it serves, and what alternatives exist in different markets.

What’s in this article?

• What is Visa?
  
• How Visa works
  
• Business benefits of accepting Visa
  
• Requirements for businesses to start accepting Visa payments
  
• Where is Visa used?
  
• Who uses Visa?
  
• Visa costs and fees
  
• Visa security measures
  
• Visa alternatives
  
• How Stripe Payments can help
  

What is Visa?

Visa connects customers, businesses, banks, and governments, enabling them to use digital currency instead of cash or checks. As a financial intermediary, Visa operates one of the most advanced and extensive payment processing networks. Visa doesn’t issue debit cards or credit cards itself. Instead, it provides the underlying system that allows authorized issuers and cardholders to facilitate electronic funds transfers (EFTs).

Though Visa predominantly handles card-based transactions, it has expanded its capabilities to accommodate mobile payments, contactless payments, and blockchain-based solutions. Its adaptability is a major reason why organizations requiring diversified payment options might choose Visa.

How Visa works

Visa plays a role in transaction authorization, clearing, and settlement. Transactions are encrypted and processed in real time, typically within milliseconds, which is important in high-volume, low-latency environments.

Visa focuses on fraud prevention and data security by employing advanced algorithms and machine learning techniques to detect fraudulent activities and protect account information. This is particularly useful for enterprises and platforms because of the volume of payments they deal with—and the liabilities at scale posed by fraud risks.

Here’s an overview of how Visa facilitates payment processing, as a card network:

• Card issuance and partnerships
  Visa collaborates with financial institutions that issue Visa-branded cards. These institutions are responsible for customer relationships and risk assessment.

• Transaction initiation
  When a cardholder initiates a transaction, information moves from the business’s POS terminal to the acquirer (the business’s bank).

• Transaction routing
  Visa acts as an intermediary, routing the transaction information to the issuing bank for approval or denial, based on various factors such as available funds or potential for fraud.

• Data security
  During this routing process, Visa employs multiple layers of security protocols to protect sensitive information and deter fraudulent activity. This includes tokenization and multifactor authentication methods.

• Settlement and clearing
  Once the transaction is approved, Visa coordinates the transfer of funds from the issuing bank to the acquiring bank. This involves steps to reconcile and settle all transactions, which are generally executed in batches at the end of each business day.

• Fee structure
  For each transaction, Visa charges a small fee, usually a fraction of the overall transaction amount. This fee is distributed among the business, the issuing bank, and the acquiring bank in accordance with predefined agreements.

• Transaction data
  Visa also provides analytics and reporting capabilities that enable businesses to monitor transaction patterns, customer behavior, and other relevant metrics. This information is often used to improve operational efficiency and formulate business strategies.

Visa also offers a range of application programming interfaces (APIs) and software development kits (SDKs) that allow payment functionality to be easily integrated into a variety of digital environments. Its network interoperability enables cross-border transactions, making it suitable for businesses that operate globally.

Business benefits of accepting Visa

Accepting Visa provides businesses with benefits that extend beyond basic transaction facilitation. Here’s what businesses can gain:

• Wider customer reach: Accepting Visa widens market access, reaching customers who prefer card payments or those without access to other forms of payment. This is especially true for international customers who rely on globally recognized payment systems.

• Quick transactions: Visa’s technology enables swift transaction authorization, clearing, and settlement. This speed benefits the business and customer, as a higher volumes of sales can be processed in less time.

• Risk management: Visa offers robust security protocols to protect against fraudulent activities. This reduces the risk exposure businesses might face in digital transactions.

• Customer insights: With detailed transaction data available, businesses can analyze customer behavior to make data-driven decisions. They can use this information for marketing strategies, inventory planning, and other operational aspects.

• Versatility: From POS terminals to ecommerce websites, Visa’s compatibility with multiple payment platforms gives businesses flexibility in how they accept payments.

• Operational advantages: Visa offers APIs and SDKs that can be integrated into existing business systems. This enables easier accounting, inventory tracking, and financial reporting.

• Loyalty programs: Visa’s infrastructure supports the integration of loyalty and rewards programs, encouraging repeat business and customer engagement.

For businesses in all sectors, Visa provides data-driven insights that can inform decision-making. Through advanced analytics, businesses can gain a deeper understanding of customer spending behaviors and transaction trends. This detailed data is helpful in formulating payment strategies.

Requirements for businesses to start accepting Visa payments

Account setup

To start accepting Visa payments, businesses typically need to set up a merchant account through an acquiring bank or payments provider.

Through various APIs and SDKs, businesses can directly integrate Visa’s infrastructure into custom payment gateways, gaining scalability and adaptability across multiple platforms and applications.

Integration options

For businesses that accept payments using Stripe products, Visa acceptance is already enabled. There’s no need to open a separate merchant account, because Stripe provides this functionality. The contractual terms, conditions, obligations, and rights are usually laid out in the agreement between the business and the merchant services provider.

After establishing merchant account functionality, businesses usually integrate payment terminals or POS systems that are compatible with Visa cards. Many merchants accept both Visa and Mastercard, although there are notable exceptions like Costco favoring Visa.

Integrating systems that accept Visa might involve using different hardware and software depending on whether businesses need to accept payments in person, online, or within a mobile app. Visa and Stripe accommodate payments in all of these environments, for customers using physical Visa credit and debit cards as well as cards stored in a digital wallet.

Security requirements

Whether using Visa or any other card network, businesses should comply with the Payment Card Industry Data Security Standard (PCI DSS), a set of security standards designed to protect card information during and after a financial transaction.

Where is Visa used?

Visa is one of the most extensively used and widely accepted payment networks: Roughly 3 billion Visa debit cards are in circulation globally. Major financial institutions, businesses, and governments rely on Visa for facilitating digital currency transactions.

Visa operates in multiple market sectors and geographic regions, and its presence extends across nearly every continent:

• North America and Europe: Visa is the payment card market leader, especially in the United States and parts of Europe. In the United Kingdom, for example, Visa’s market share is nearly 80%. Customers and businesses use Visa extensively for various transaction types, from retail to B2B payments.

• Asia Pacific: Visa has a high acceptance rate in countries such as Japan, Australia, and Singapore. And it has gained traction in nations with strong domestic payment networks, such as China and India, particularly for international transactions.

• Latin America: From Brazil to Mexico, Visa is a common payment network. Visa often collaborates with local financial institutions to offer cards and payment solutions tailored to local market needs.

• Middle East and Africa: Visa has gained acceptance in major economic hubs such as the United Arab Emirates, South Africa, and Saudi Arabia, often serving as a preferred option for local and international transactions. It has also proactively entered markets that are still developing their financial and digital payment infrastructures, including countries in sub-Saharan Africa.

Financial institutions across these regions often choose Visa because of its strong security measures, scalability, and extensive global acceptance. Given its widespread geographic reach and deep market penetration, Visa remains a top choice for businesses that operate or transact internationally.

Who uses Visa?

Visa holds a dominant market share in several key regions and is used by businesses across all industries to make and accept payments. In the US, for example, it accounts for more than 60% of the total credit card market. Here’s a list of the major sectors where Visa is commonly used:

• Retail and ecommerce businesses
  Visa is commonly accepted at physical retail locations, ranging from small boutiques to large-scale department stores. It’s also a staple payment method on ecommerce platforms, often preferred for its speed and security features.

• Hospitality and travel businesses
  Hotels, airlines, and travel agencies use Visa extensively for booking and payment processes. Its global acceptance makes it a preferred choice for travelers and international businesses.

• Utilities, services, and the public sector
  From telecom businesses to utility providers, Visa is a common method for recurring payments and one-time charges. Automated payment systems often support Visa transactions to simplify customer billing. Government agencies and educational institutions often support Visa for its ability to handle large transactions and provide detailed transaction data.

• B2B businesses and international commerce
  Visa supports a variety of B2B payment options, such as virtual cards and wire transfers, which are optimized for vendor payments, payroll, and bulk disbursements. It’s also a popular choice for cross-border commerce because of its multicurrency support.

• Subscription services
  Media platforms, software-as-a-service (SaaS) providers, and various subscription-based models frequently rely on Visa for automated recurring charges.

• Financial markets
  Hedge funds, asset managers, and other entities within the financial sector use Visa for a range of investment activities, including funds transfers and liquidity management.

One of the primary reasons institutions worldwide use Visa so frequently is because it’s also popular with a diverse set of customers, including:

• Individual customers
  Visa cards are often the default payment option for everyday individuals, catering to a broad array of needs, from basic shopping to complex financial management. Many people prefer Visa because of its widespread acceptance and security features.

• Freelancers and gig workers
  Independent professionals use Visa for receiving payments and covering business-related expenses. Visa’s range of financial products caters to the flexibility and diverse income streams that characterize this work model.

• Travelers
  Frequent fliers and international travelers often choose Visa because of its global acceptance and multicurrency capabilities. Many travelers specifically look for cards that offer no foreign transaction fees, a feature available in many Visa offerings.

• Small-business owners and entrepreneurs
  Visa’s small-business cards offer specialized solutions that include expense management and rewards for business-related spending. New business ventures often rely on Visa for its easy integration with payment platforms and point-of-sale (POS) systems.

Each of these customer categories finds value in the features and benefits that Visa offers. In particular, the payment network’s adaptability to different spending behaviors and lifestyles makes it broadly appealing.

Visa costs and fees

Several factors can affect the cost of accepting Visa payments, including transaction volume, business type, and the specific services chosen. Some financial institutions and payment processors charge a flat fee per transaction, while others may charge a percentage-based fee. For an overview of Stripe’s fee structure, go here.

Here are some of the key costs that may be involved with Visa transactions:

For businesses:

• Transaction fees
  Businesses typically incur a fee for each Visa transaction. This can be a flat fee, a percentage of the transaction amount, or a combination of both. The specific fee structure often depends on the agreement with the acquiring bank.

• Monthly and annual fees
  Some providers charge ongoing fees for access to their services, including account maintenance and statement fees.

• Chargeback fees
  If a customer disputes a transaction, businesses may incur additional costs associated with chargebacks.

• Cross-border fees
  International transactions often come with additional fees, which can be a significant consideration for businesses with a global customer base.

• Sector-specific fees
  Certain industries, such as hospitality or travel, may have specialized fee structures.

• Premium card fees
  Transactions with reward or premium cards usually cost businesses more in fees compared with standard cards.

• API and integration fees
  If a business opts for specialized integration with its existing systems, additional costs may apply.

For customers:

• Foreign transaction fees
  Customers might pay extra fees for transactions carried out in a foreign currency or outside their home country.

• Cash advance fees
  Obtaining cash using a Visa credit card typically comes with a fee, either a flat rate or a percentage of the advance.

• Late payment fees
  Failing to adhere to the payment schedule can result in extra costs for the cardholder.

• Annual fees
  Some Visa credit cards come with yearly membership fees, especially those offering premium benefits.

Fees can differ significantly depending on the region or country. In some cases, local regulations might cap certain types of fees. Different Visa products, such as debit cards, credit cards, and prepaid cards, come with distinct fee structures.

Visa security measures

Given the diverse set of businesses and customers Visa serves, as well as its global reach, security is incredibly important for Visa’s vast payment environment. Sophisticated, layered security mechanisms safeguard transactional integrity and data confidentiality. These include:

• Encryption methods
  Visa uses a more layered encryption strategy than just the basic SSL/TLS technologies. For example, Visa encrypts data that’s being transferred differently than data that’s being stored, reducing vulnerabilities at different stages of data processing.

• Tokenization
  Tokenization replaces card data and often integrates with additional data points such as transaction history to create a multidimensional token that’s hard to decrypt.

• Risk assessment algorithms
  These algorithms perform continuous, real-time assessments using machine learning models trained on massive datasets, making them increasingly accurate.

• Multifactor authentication specifics
  This feature includes SMS-code-based authentication and application-based and hardware-based second factors, such as security keys, that are resistant to phishing.

• Biometric modalities
  Visa is expanding the number of biometric modalities it supports beyond fingerprint and facial recognition to include voice recognition and behavioral biometrics.

• Regulatory compliance
  The European Union’s PSD2 (Second Payment Services Directive) is a regulatory framework aimed at improving payment security, fostering innovation, and enhancing customer protection within the EU’s electronic payments market. While the EU’s PSD2 is well known, different jurisdictions such as Singapore, Australia, and Canada have their own sets of regulations that Visa complies with. In some cases, these regulations specify the kind of encryption or data storage requirements that must be met.

• High-risk sectors
  Businesses in high-risk sectors—for example, those that deal with regulated substances—face additional scrutiny. This can include higher transaction fees or requirements to use specific advanced security features.

• Customized products
  Different cards or payment solutions often have custom security features. For instance, corporate cards might offer advanced spend controls and real-time notifications, which function as financial management and security features.

Visa offers adaptable, multilayered security solutions that reflect the complexity of global payment processing.

Visa alternatives

Visa is not the only option for global payments. Businesses and customers have viable alternatives based on their specific needs, and the options can differ significantly depending on geographic location, transaction type, and the costs involved. In the US, the other major card networks are:

• Mastercard: Often a close competitor to Visa, Mastercard offers similar benefits and global acceptance. Mastercard also has specialized business services such as analytics tools.

• American Express: Though less universally accepted, American Express often offers more robust rewards programs and benefits, such as purchase protection and travel insurance.

• Discover: Accepted mainly in the US, Discover is known for its customer service and relatively lower fees.

You can read more details about US card networks here and more about other payment networks here.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe.
  
• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
  
• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.
  
• Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.
  
• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% uptime and industry-leading reliability.
  

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.