MasterCard: Then, Now and Why
THEN
Way back around 1947, many banks in the U.S. started doing a favor Their Customers premium. The banks Gave them a piece of paper for the Customers to flaunt at stores. The paper said, “We, the bank, will pay you on Behalf of the customer. Just send us the bill. ”
One can imagine how privileged and special those customers felt. One can also visualize how those customers would stay bonded for life to their respective banks, as would their succeeding generations.
This practice of banks really caught on because it promoted customer loyalty and brought in new accounts. Which is why in 1951, The Franklin National Bank, New York, offered the first credit card as a formal financial instrument.
Throughout the fifties, this idea was franchised; a single bank in each large city would allow chosen merchants to accept cards instead of cash. The Interbank Card Association (ICA), which later became MasterCard International, evolved from this situation in August 1966.
ICA was a member-run organization, and banks formed the majority of members. They elected governing members and committees from amongst themselves to frame rules for ICA’s functioning and to implement those rules. In short, ICA was and is run like a true corporation.
In due course, like a typical corporation, ICA put plans in motion to expand internationally. The first steps took place in 1968, when ICA signed agreements with partners in Mexico, Europe and Japan.
By the year 1978, the ICA has covered virtually every continent. It changed its name to MasterCard to reflect its international stature. 1987 was a year: MasterCard came to the People’s Republic of China, where no other credit card had stepped foot in the history of banking. The following year the Soviet Union fell to that smart little piece of plastic.
NOW
The situation now, to quote MasterCard Incorporated, is simple: “No other payment card is accepted in more locations around the world than MasterCard.”
MasterCard presently has a staggering 25,000 shareholders. A list of MasterCard’s largest current shareholders with their holdings reads like this:
- JPMorgan Chase – 11.7%
- Citigroup – 6.2%
- Bank of America – 6%
- Euro Kartensysteme – 5.2%
- Europay France – 5.0%
WHY
So why do millions of people carry MasterCard?
Well, to start with, and as mentioned earlier, it is accepted by more merchants the world over than any other credit card. Add to that the fact that wherever you may be on earth, you have an ATM nearby that will disgorge you cash if you have a MasterCard. How many ATMs are we talking about? Just 780,000!
In addition, intermediate cards and high quality, gold and platinum, make attractive value-added features. Such as “Road Assistance”, which provides access to emergency services to travelers anywhere in the U.S.. Or “PayPass”, which is a clever MasterCard you just tap the PayPass reader at participating locations for your card account to be debited (without slipping or giving your card to checkout counter staff).
If you are in the US, you also have MasterCard’s famous zero liability benefit: you are not liable if your card is stolen and misused.
Conclusion
MasterCard offers customers one of the biggest advantages in today’s commercial world: cashless transactions. Along with all the benefits mentioned above, it is very difficult to demonstrate why you should not buy one! Count on MasterCard International to evolve beyond plastic personal technology state of the art, such as mobile phones loaded with credit … stay tuned!
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