MasterCard Worldwide is a major leader in the global electronic payment industry, second only to Visa. MasterCard Worldwide is the second-largest issuer of credit cards, and offers an expanding line of contactless and wireless payment methods, as well as advisory services to businesses that accept MasterCard. MasterCard Worldwide’s current thrust is to be at “the heart of commerce,” connecting purchasers with sellers no matter how remote they may be, and offering flexibility and purchasing power that will grow with the market.
MasterCard had its genesis in the early days of the credit card industry. In 1966, fourteen banks in Buffalo, New York got together and formed a member-owned association, the Interbank Card Association (ICA), to pool their resources, organize such functions as authorizations, clearing and settlement, and offer a powerful credit card that rivaled the competition, BankAmericard (which later transformed into Visa). ICA, which was operated by committees of member bank representatives rather than run by a single powerhouse bank, took aggressive action to market its credit card and bring in new members. By 1968, ICA had formed strong relationships with Banco Nacional in Mexico and Eurocard International in Europe, and established a Master Charge presence in Japan as well.
By 1973, ICA had developed the Interbank National Authorization System (INAS), a computer network that allowed merchants to quickly and directly authorize transactions electronically, rather than over the phone as had been the procedure to date. The following year, all new ICA cards, issued under the name Master Charge, were standardized with the magnetic stripe, which further streamlined the authorization process while offering unmatched fraud protection. Interbank Network for Electronic Transfer (INET), a new system that allowed credit card transaction records to be transferred electronically between merchants and issuers, made the use of credit cards even quicker and easier, and attracted more merchants, than ever before.
The ICA attracted new international members in the 1970s, with Access Ltd. in the United Kingdom and Standard Chartered Bank of South Africa joining the association and offering the Master Charge credit card in their own markets. The name Master Charge and its trademark interlocking circles logo became MasterCard in 1979, in order to reflect the company’s widening worldwide reach and its growing range of electronic payment services, beyond the credit card at its core. The “i” logo of the ICA was dropped from the card.
At about this time, it became clear that MasterCard would need to make some major changes if it wanted to compete with Visa. Starting in 1980, the new Chief Executive Officer, Russell E. Hogg, reorganized the company to better facilitate the authorization and clearing process. He made it MasterCard’s priority to offer an indispensable range of products and services, including MasterCard Travelers’ Cheques in 1981, the Emergency Card Replacement program in 1983, and the innovative laser hologram on all MasterCard credit cards for added security. The following year, MasterCard launched Banknet, the electronic system that facilitates international credit card transactions. MasterCard made a major push toward automating all aspects of credit card transactions, making the process faster, easier and more secure for merchants and consumers alike
In 1985, MasterCard formed the Card Program Development Group, whose first major action was to introduce the MasterCard BusinessCard internationally. The following year, MasterCard penetrated the Far East by opening an office in Hong Kong, and in 1986, MasterCard was the first credit card available in China. MasterCard reached out to Latin America through its new Miami office.
MasterCard continued to grow its range of products and services to complement its credit cards. It purchased the automatic teller machine (ATM) network Cirrus in 1988, bought a stake in Eurocard International, and began issuing credit cards in the Soviet Union.
In 1989, under the new leadership of Alex W. Hart, MasterCard launched its own ATM network, which combined with Cirrus the following year to offer MasterCard ATM services at more locations than ever before. The following year, MasterCard raised its profile by becoming the official credit card for the 1990 World Soccer Cup. It would actually sponsor the contest in 1994. Also in 1990, MasterCard launched MasterCom, which allowed banks to share images of sales slips electronically, on a global basis. Banknet began processing transactions in India. Together with Europay across the Atlantic, MasterCard presented Maestro in 1991. This online, point-of-sale debit system processed transactions for cardholders from a wide network of participating banks.
MasterCard again expanded its range of services beyond credit cards and debit card transactions in 2001, when it launched MasterCard Advisors, which provided consulting services for clients in all aspects of the electronic payments industry. The following year, MasterCard merged with Europay to create MasterCard International, a private share corporation that offered worldwide services as one large company. Also in 2002, MasterCard launched its contactless payment program, PayPass. It worked with Chase, Citibank and MBNA. New member banks continued to join PayPass over the next couple of years, and the technology began winning awards, most notably two Breakthrough Awards from Card Technology magazine.
The following year, MasterCard International reorganized with a new corporate governance and ownership structure, and began trading on the New York Stock Exchange under the symbol MA. A new corporate name, MasterCard Worldwide, enhanced the company’s identity as a global leader in electronic payments of all types. In 2007, MasterCard Worldwide launched the Worldwide Centers of Commerce, a multi-year research project that will rank and analyze the world’s top 50 cities that drive global commerce. The following year, it launched Integrated Processing Solution (IPS), its global platform for the processing of debit and prepaid card transactions. In 2008, MasterCard Worldwide acquired Orbisom Ltd.,a payment solutions software provider.
MasterCard is developing an ever-evolving global identity that blends its accrued and developing knowledge with technological innovation and fresh ideas. The goal is to always offer a wide range of reliable, fast, convenient and secure ways for money to change hands electronically, and MasterCard Worldwide is clearly a leader in its field.
