MasterCard

MasterCard Worldwide is a multinational corporation headquartered in Purchase, New York, that facilitates transactions between merchants’ banks and purchasers’ banks when its branded credit and debit cards are used for payment. It became a publicly traded company in 2006, but before that MasterCard Worldwide was a “membership organization” owned by the 25,000+ financial institutions issuing its card.

To compete with Bank of America’s new BankAmericard, which eventually became Visa, a number of California banks formed the Interbank Card Association (ICA) in 1966. The following year, the ICA licensed the name “MasterCharge” from the First National Bank of Louisville, Kentucky and, now joined by New York’s Marine Midland Bank (now HSBC Bank), created “Master Charge: The Interbank Card.”

Thirty Years of Growth

The somewhat lengthy name was altered and shortened to “MasterCard” in 1979. Now expanding internationally, by 2002 MasterCard International had acquired the UK’s Access card and merged with Europay, a large European card association. Europay brought many years of experience in financial services to the growing firm, as well as the sizable customer base it had cultivated for its “Eurocard.”
MasterCard International changed its corporate name to MasterCard Worldwide in 2006. The company also revised its corporate logo by including another, third circle with the existing two. However, the familiar credit card logo was left unchanged, with the two simple, overlapping circles with their famous “earth tones.”

The first decade of the new millennium saw the unveiling of several powerful, popular new advertising campaigns for MasterCard. Its “Priceless” commercials have been so successful that the terms and phrases from the ad copy have entered the “cultural vocabulary,” and are routinely parodied and spoofed on the Internet, on television and in print publications.
Decentralized and flexible

Banknet, operated by MasterCard, is a communications network that links MasterCard issuers, acquirers and data-processing facilities together in a single financial operation. The hub of this operation is St. Louis, Missouri. MasterCard Europe’s EPS-Net processing operation interfaces with Banknet, but is slated for replacement sometime in 2009.

While Visa processes all transactions centrally – in a “star-based” system where all endpoints terminate at a few main data centers – MasterCard’s network is “edge-based” and peer-to-peer. This means that MasterCard transactions are handled more directly and efficiently, making its network more flexible and “fault tolerant.” In MasterCard’s system, one processing bottleneck or a single instance of equipment failure will not isolate great numbers of endpoints or “crash” the system.