What should I know about the Mastercard credit card?

Firstly, it's important to understand that essentially, there is no difference between Mastercard and Visa. They are both Credit card businesses providing payment solutions. They do, however, have different histories, and have different claims to fame.

Mastercard is owned by over 20,000 member organisations. These serve customers in over 210 countries, and process over 15 million transactions a day in over 180 currencies.

The origins of Mastercard can be traced back to the late 1940s. At the time, several US banks came up with the idea of specially issued paper to give to customers that could be used like cash in local stores. The Franklin National Bank in New York formalised this practice in 1951 by introducing the first Credit card in 1951.

This developed over the next decade in each major city where a single bank would accept cards as payment with certain merchants. These were set up as franchises, and in 1966, one of these franchises formed the Interbank Card Association (ICA) which later became MasterCard.

A single bank did not dominate the ICA. The association was run by member committees, which established rules for settlement, clearing and authorisation. Unlike other similar organizations, committees were established to run the association. They established rules for authorisation, clearing and settlement and handled security, marketing and the legal aspects of running the organisation.

The 1960s and 1970s saw the ICA forming associations around the globe. This started in 1968 with an association with Banco Nacional in Mexico. In the same year, alliances were formed with Eurocard in Europe, and the first Japanese members joined. In the 1970s, countries from Africa and Australia joined, and the ICA changed its name to Mastercard. In the 1980s, Mastercard expanded into Asia and Latin America, becoming the first payment card in China in 1987, and in 1988 in the Soviet Union. There are now 30 offices around the world.

The company sees it's role as a facilitator between people using and accepting payment, and the financial institutions charged with managing this relationship. It provides a global telecommunications network for its members so that electronic authorization can take place, along with related clearing and settlement.

The company is truly international and is accepted in most parts of the world including England, Scotland, Wales and Northern Ireland in the UK.

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© The Pink Fridge Online Magazine 2008 - Mastercard

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