How Payment Networks Power Digital Transactions Around the World

One of the most important points in closing a sale is getting paid quickly, reliably, and without complications. In fact, 40% of customers abandon their cart if a payment fails, and 33% won’t retry buying. That’s a lot of lost business, especially when you’ve done all the hard work to bring the customer to checkout.

Whether you run an eCommerce business or a physical store, a smooth payment experience can shape how customers perceive your brand and whether they come back.

What makes this payment experience work in the background is something called a payment network. It’s the system that quietly moves money from your customer’s bank account to yours. Your buyers don’t see it, but it plays a central role in how you accept payments (through cards, UPI, wallets, or bank transfers).

This article will talk about how these payment networks work, who runs them, and how platforms like Shiprocket Checkout help sellers like you make the most of them.

What are Payment Networks?

You may already be accepting payments through cards or UPI, but have you ever wondered what actually happens after a buyer clicks “Pay Now”?

The payment network is a digital system that connects your buyer’s bank, your payment gateway, and your own bank account. It checks if sufficient funds are available, runs security checks, and confirms the transaction within a few seconds.

If you’re accepting cards, networks like Visa, Mastercard, or RuPay pitch in to pass payment information from the buyer’s bank to yours. In case of UPI also, the same logic applies; the system checks and clears the payment through a secure connection, so you can confidently confirm the order.

Payment networks fall into four main groups: 

Credit Card Networks

Credit card networks are the systems that connect banks, merchants, and payment processors to ensure credit card transactions go through smoothly. In India, banks like HDFC, ICICI, Axis, and SBI issue credit cards that run on major networks like Visa, Mastercard, and RuPay.

Visa and Mastercard are international networks that allow multiple banks to issue cards, while RuPay is India’s domestic network managed by NPCI, widely used for both credit and debit cards. About 30% of India’s digital transactions happen through credit cards or EMI options. 

For sellers, having a reliable connection to these networks means fewer payment failures and smoother customer experiences.

EFT (Electronic Funds Transfer) Systems

EFTs are used to transfer money digitally between people, companies, and financial institutions. Some of the most commonly used EFT networks are:

• NEFT (National Electronics Fund Transfer): It’s a popular payment system, and has shot up from 262 crore to 927 crore transactions between 2019 and 2024 (28.7% CAGR). You can settle fund transfers in batches through it, and make business payments and recurring transfers. NEFT services, as of 2025, are accessible through 1,74,762 IFSCs (Indian Financial System Codes) of 236 member banks. 
• Real Time Gross Settlement: RTGS is a service that enables real-time transfers of high-value (₹2 lakh and above). In FY 2023–2024, RTGS handled almost 27 crore high-value transfers totalling ₹17.08 lakh crore. This payment network can be used for large or urgent payments. At the moment, 250 member banks’ 1,73,688 IFSCs offer RTGS services. 
• IMPS (Immediate Payment Service): This service is available around the clock and allows you to make transfers at any time of day. You can use it for immediate settlements and refunds, and it works well for small real-time fund transfers. Currently, 947+ banks support IMPS. As a widely used payment service, it processed about 600 crore transactions in FY 2023-2024.

Peer-to-Peer (P2P) Payment Networks

P2P systems like UPI are especially useful for everyday money transfers or small payments and have become the most popular digital payment method in India, powering around 83% of all digital transactions in 2024.

You or your clients/customers can send money directly or pay with P2P services, via apps like Paytm, Google Pay, and others. While these apps are connected to your bank account, the transaction itself doesn’t rely on traditional card networks like Visa or Mastercard. Instead, they use UPI (Unified Payments Interface), a real-time payment system developed by NPCI, which acts as a digital layer between banks. 

ATM Networks

ATM networks connect banks to machines for cash withdrawals, deposits, and transfers. Two of the globally leading players in this network are Visa’s Plus and Mastercard’s Cirrus. In India, the most widely used ATM networks are:

• National Financial Switch (NFS): The National Payments Corporation of India manages this ATM network, which is the largest one in India. It connects over 1.2 lakh ATMs throughout the country and supports most bank-issued debit cards. 
• Visa’s Plus and Mastercard’s Cirrus: They are still there in India, especially for international transactions, but NFS dominates our country’s domestic usage.

Understanding the Lifecycle of a Payment Network

Here’s what’s happening behind the scenes when a customer pays at your store:

• They pick how they want to pay, maybe by card, UPI, or a digital wallet, and submit the payment. Your payment gateway sends the customer’s payment details to your provider in real time. 

• After this, the payment network contacts the customer’s bank to check if the transaction can be approved. 

• The authorised bank then either gives the go-ahead or declines the transaction after confirming the balance or any red flags. 

• If it’s approved, that confirmation makes its way back to you so you can start processing the order. 

• The actual transfer of money happens later, usually in scheduled batches, when the customer’s bank sends the amount to yours.

It’s a layered process involving multiple systems, yet all the backend functioning happens in a few seconds, securely.

Top Players in the Payment Network Space

Different networks support different kinds of payments. Depending on your customers and how you sell, you may work with one or more of these:

Visa and Mastercard

Visa processed over 234 billion transactions globally, creating a $16 trillion cash volume in FY 2024, while Mastercard’s total transaction volume reached 9.757 trillion in the same year. Together, they hold nearly 87% of the global credit card market share. 

These networks don’t issue cards themselves; they do it by connecting issuing and acquiring banks. It makes them ideal for businesses that need to accept card payments globally.

RuPay

The National Payment Corporation of India (NPCI ) created this domestic card network. RuPay facilitates inexpensive, safe card transactions. In 2024, over 75 crore RuPay cards have been issued in India, making up more than 60% of all debit cards in use. 

RuPay’s payment network is particularly strong in government benefit programs and public sector banks. About 700 banks in India are issuing RuPay, and over 350 million cards have been issued till now.

UPI

It’s not a card network, but one of India’s fastest-growing digital payment systems. UPI connects multiple banks and allows instant, round-the-clock transfers using mobile numbers or UPI IDs or VPAs (Virtual Payment Addresses). 

The popularity of this payment network continues to increase. UPI recorded about 16.58 billion transactions, amounting to ₹23.49 lakh crore in value in October 2024. It marked a 45% year-on-year increase.

SWIFT (for international transfers)

If you do business abroad, you may have come across SWIFT, a payment network that banks use for secure global transactions. It connects over 11,000 financial institutions in 190+ countries. 

With over 44.8 million FIN messages managed daily and a 6% annual growth rate, SWIFT is the industry standard for international B2B payments. A large chunk of Indian importers and exporters use SWIFT via their banks for safe international transactions.

How Shiprocket Checkout Simplifies Payment Integration for Sellers

If you’re selling online and already using Shiprocket’s shipping services, adding Shiprocket Checkout brings payments under the same roof.

Shiprocket Checkout lets you offer your customers a wide range of payment methods, cards, UPI, wallets, and net banking, without needing to sign up separately with multiple providers. It acts as the bridge between your storefront and the payment networks working behind the scenes. This is how it benefits your business:

• One-time setup: You don’t have to connect individually to Visa, Mastercard, UPI, or other networks. Shiprocket Checkout automatically does it for you.
• Multiple payment options: You cater to a broader customer base by giving them multiple payment modes or their preferred methods.
• Fewer failed payments: Our payment system automatically retries failed attempts or offers alternative payment paths to your buyers.
• Quicker settlements: You get paid promptly, with a clear view of payout timelines.
• Safe transactions: We have built-in fraud checks and PCI-compliant infrastructure to protect you and your customers.

Conclusion

Digital payments may seem effortless to your customers, but behind the scenes, they rely on payment systems built for reliability, speed, and security. These payment networks are the invisible backbone. They connect customers, banks, and businesses to keep the flow of online commerce running smoothly.

To keep your business running efficiently, having the right payment infrastructure is essential. Whether you’re starting out or expanding, platforms like Shiprocket Checkout help you access dependable payment networks. This makes it easier to collect payments and gives you the resources you need to grow your business confidently.