What we know today as the MasterCard was originally called “Master Charge,” and was created as a joint venture between United California Bank, Crocker National Bank, Wells Fargo, and Bank of California. These banks, together with the First National Bank in Louisville and Marine Midland Bank (later HSBC) in New York, formed the Interbank Card Association to create “Master Charge – the Interbank Card” in 1967. The card was conceived as a competitor to the BankAmericard that had been created by Bank of America and which was a predecessor of today’s Visa card.
The MasterCard Story
As far back as the late 1800s, merchants extended lines of credit to their customers using cards or special “credit coins” as currency. These credit cards were a private arrangement between the business and the customer, and were only accepted at the business that issued the card. It wasn’t until about the mid fifties that banks began issuing their own charge cards and “plastic” became a method of payment for most American consumers.
The company changed its name to MasterCard in 1979 and during the 90s, acquired UK-based credit card company, Access Card. In 2002 they also took over a European based credit card issuer, Europay. Both of these companies were subsumed under the MasterCard name. After it’s initial public offering in 2006, MasterCard is traded on the New York Stock Exchange and is valued at around 30 billion dollars. The company also changed its name to MasterCard Worldwide and modified their corporate logo. Instead of two intersecting circles, the new corporate logo included a third translucent circle in the middle, which overlaps the original two. However, the logo on the cards remains the same: the two intersecting red and orange circles, which have been MasterCard’s distinctive logo since the company’s inception.
Today, MasterCard is a worldwide association of banks and financial institutions. Like their main competitor, Visa, MasterCard is not directly responsible for the credit cards or loans that are branded under their card name. The financial institutions that issue MasterCards are responsible for the debts. MasterCard creates revenue by charging transaction fees to consumers, and also to the financial institutions that participate in the MasterCard network.