system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: What do companies like Mastercard, Visa and American Express actually do, and why do some establishments take some and not the other?
gpt
Payment industry expert here.

The "card brands" as they are known, do surprisingly little. 1) They market their brand (commercials). 2) They operate a payment network over which transactions move (from cardholder to merchant).

And for #2, they only do a part of that (like the middle 20-40% of a transaction). Your bank (the one who issued you the card), the merchant's bank, and a bunch of intermediate payment processors all process transactions as well. Each one of them (and the card brand) take a little slice of the transaction.

The one exception is American Express. They are an issuer (they directly issue cards - not a bank). Also, they acquire merchants directly; they don't use an acquiring back or independent sales organization (ISO).

The reason some merchants accept cards from one or more card brands is because they have to pay interchange fees to their ISO or acquiring bank to process transactions. They have to weigh the cost of paying these fees with the benefit of being able to accept those types of cards. This is why so many places don't accept AMEX (because their fees are high - high cost) and Discover (not many cardholders - low benefit).