A payment switching network is a private network that carries card payments between card machines, payment processors and banks. It is also called a payment connectivity network. Switching means passing each payment to the right bank or network.
Consider a petrol pump on a highway near Nashik, with six card machines. When a driver taps a card to pay for fuel, the machine must send the payment request to the petrol pump's acquiring bank. The acquiring bank is the shop's own bank, which receives card payments on behalf of the shop. Many machines do not send this request over the open internet. They send it over a private network that a specialist company runs. That network chooses a route, delivers the request to the acquiring bank, and brings the answer back to the POS terminal.
Why use a private network? There are three reasons.
First, card details must be protected. Each message is encrypted, which means it is scrambled so that only the receiving system can read it. A private network adds one more layer of protection, because outsiders cannot reach it.
Second, the whole approval must finish in about two seconds. A private network gives a short and predictable delay for each message.
Third, a payment must not fail because one line is down. Say the petrol pump's main line goes down during the evening rush. The network then sends each request on another route, so drivers can still pay by card.
The same kind of network also connects processors to card networks and to banks. Inside a bank, the requests arrive at a payment hub. A payment hub is one system through which the bank sends and receives every kind of payment, such as cards, UPI, NEFT and RTGS.