Tuesday, November 10, 2009
Wednesday, October 28, 2009
Credit Card Processing and Merchant Accounts
You may never know this, but when you accept credit cards online, your sales increases by about 400%! You just can't compete at a normal field if you don't accept credit cards. Now the truth I want you to know now is that you can start accepting credit cards on your web site in less than 24 hours! In addition to this, you can also receive a simple-to-use, web-based credit card processing terminal so you can process transactions manually. With a versatile ecommerce software , you have a complete solution.
Let me introduce you to this wonderful site that will provide you with all the services you ever need when it comes to receiving payment online and at no cost at all! Yes, you heard me right! In less than five minutes you can actually have your web site set up for you and ready to recieve payments.Rush now to:
Monday, October 26, 2009
Making Your Credit Cards Work for You
If you're paying interest on your current credit card balance, you may want to consider a new card with a great deal. 0% interest transfers enable you to move the balance from one credit card to the next without paying any interest for periods of up to 15 months.
Top tips
* Read the small print - great deals often come with balance transfer fees of 3% or more, and the interest rates charged once the 0% offer period has ended, can be quite high.
* Try to ensure you can pay off the balance by the time the 0% deal has ended.
* Don't add to the outstanding debt by using them for new purchases. Most credit card companies will use your monthly repayments to pay the debt on which you're paying the lowest interest rate first.
Low purchase rates
Some credit cards offer introductory deals of 0% interest on new purchases for up to 10 months. If you're looking to make a large purchase, this could be the credit card you need.
Top tip
* Work out how much you'll need to pay every month in order to clear the balance by the end of the offer period - and stick to it. If you can't manage it, you might want to look into taking out a loan.
Cash-back cards
Rewards are always good, and some credit cards will give their customers cash for purchases they make using their card. The best deals in this area give you 5% cash back for spending up to a certain limit for the first three months. After that, you'll receive between 0.5% and 1.5% back, depending on the total value of transactions you make.
Other cards typically offer around 0.5% cash-back. You can rack up tidy sums on these cards by using them for your regular monthly outgoings, such as the supermarket shopping.
And if you're feeling generous, there are credit cards which work in a similar way, but instead of you getting the money, a charity, such as the NSPCC, Cancer Research, or the RSPB receives a donation. Organisations typically get 0.25p for every £1 you spend, as well as a one-off donation, often of around £20, when the card is first taken out.
Top tip
* Always try to pay off your balance in full. With interest rates of 17.9% or more, the benefits of these cards could be instantly wiped out if you don't pay the debt each month.
Other rewards
Free airline tickets, airmiles and the accumulation of reward points that can be redeemed against shopping vouchers and money-off days, are just some of the other rewards offered by credit cards.
The value of rewards ranges hugely and can be low, so check if you receive more points by shopping at certain retailers. If so, they're the shops to flash your plastic in.
Top Tip
* Again, interest rates can be high, so reward cards are great if you can clear your balance in full each month. If not, you may be better off opting for a low interest rate card.
Travelling abroad
These are a dying breed, but there are still some credit cards out there that you can use abroad without incurring hefty charges - and that's the one you want for your travels.
Credit card providers typically charge commission of 2.75% on each foreign transaction made, which can add up to a significant sum over the course of a holiday.
Top tip
* Be warned, cards that offer free overseas transactions don't always offer the most competitive interest rates, so be sure to clear the balance when you come home.
Cards for cash
If it's hard cash you're after, you'll pay a hefty sum if you use a credit card for withdrawals and may well be better off taking out a lower interest loan or using your overdraft (especially if you have a free overdraft facility).
Some credit cards, however, do allow you to charge up your account with money that you can then withdraw without having to pay interest at the cash advance rate. You may even receive interest on your in-credit balance.
Top tips
* Read the small print - great deals often come with balance transfer fees of 3% or more, and the interest rates charged once the 0% offer period has ended, can be quite high.
* Try to ensure you can pay off the balance by the time the 0% deal has ended.
* Don't add to the outstanding debt by using them for new purchases. Most credit card companies will use your monthly repayments to pay the debt on which you're paying the lowest interest rate first.
Low purchase rates
Some credit cards offer introductory deals of 0% interest on new purchases for up to 10 months. If you're looking to make a large purchase, this could be the credit card you need.
Top tip
* Work out how much you'll need to pay every month in order to clear the balance by the end of the offer period - and stick to it. If you can't manage it, you might want to look into taking out a loan.
Cash-back cards
Rewards are always good, and some credit cards will give their customers cash for purchases they make using their card. The best deals in this area give you 5% cash back for spending up to a certain limit for the first three months. After that, you'll receive between 0.5% and 1.5% back, depending on the total value of transactions you make.
Other cards typically offer around 0.5% cash-back. You can rack up tidy sums on these cards by using them for your regular monthly outgoings, such as the supermarket shopping.
And if you're feeling generous, there are credit cards which work in a similar way, but instead of you getting the money, a charity, such as the NSPCC, Cancer Research, or the RSPB receives a donation. Organisations typically get 0.25p for every £1 you spend, as well as a one-off donation, often of around £20, when the card is first taken out.
Top tip
* Always try to pay off your balance in full. With interest rates of 17.9% or more, the benefits of these cards could be instantly wiped out if you don't pay the debt each month.
Other rewards
Free airline tickets, airmiles and the accumulation of reward points that can be redeemed against shopping vouchers and money-off days, are just some of the other rewards offered by credit cards.
The value of rewards ranges hugely and can be low, so check if you receive more points by shopping at certain retailers. If so, they're the shops to flash your plastic in.
Top Tip
* Again, interest rates can be high, so reward cards are great if you can clear your balance in full each month. If not, you may be better off opting for a low interest rate card.
Travelling abroad
These are a dying breed, but there are still some credit cards out there that you can use abroad without incurring hefty charges - and that's the one you want for your travels.
Credit card providers typically charge commission of 2.75% on each foreign transaction made, which can add up to a significant sum over the course of a holiday.
Top tip
* Be warned, cards that offer free overseas transactions don't always offer the most competitive interest rates, so be sure to clear the balance when you come home.
Cards for cash
If it's hard cash you're after, you'll pay a hefty sum if you use a credit card for withdrawals and may well be better off taking out a lower interest loan or using your overdraft (especially if you have a free overdraft facility).
Some credit cards, however, do allow you to charge up your account with money that you can then withdraw without having to pay interest at the cash advance rate. You may even receive interest on your in-credit balance.
Whose Card Is It?
The background
Keeping up with who owns what in the financial services industry is never easy, particularly when it comes to credit cards.
And, it's just got even more confusing thanks to the recent wave of consolidation in the banking sector, creating anomalies where banks have the same parent company but a different credit card provider.
Who owns what?
One of the UK's biggest credit card providers is MBNA Europe Bank.
As well as offering its own-brand credit cards, it also provides plastic for:
• Alliance & Leicester
• Virgin Money
• Smaller building societies
• 400 affinity cards including Manchester United, Liverpool Football Club, the WWF and the British Heart Foundation
Barclaycard
Barclaycard are also a major card issuer after acquiring Discover Financial Services' UK credit card portfolio last year. While most of us may not have heard of Discover before, many of its brands are household names, such as Goldfish, Morgan Stanley and the Caravan Club.
Barclaycard has since rebranded all these cards to contain the Barclaycard name, but also provides a number of cards for third parties including Sky, Thomas Cook, Argos, Bhs and Hilton Hotels.
Multiple brands
A number of banks operate cards under several of their own brand names:
• The Royal Bank of Scotland has credit cards bearing its own name and NatWest's, as well as Mint.
• The Bank of Ireland provides credit cards for the Post Office, as well as their own brand.
• HBOS offers credit cards under both the Halifax and Bank of Scotland names, in addition to more than 30 affinity or co-branded cards.
Co-operative Bank
The Co-operative Bank has its own credit card and one under its Smile brand. It also has 18 affinity cards with charities including Amnesty International, Oxfam, the Woodland Trust and the RSPCA.
But who is the owner?
Just because two banks belong to the same banking group, doesn't mean it's safe to assume their credit cards have the same owner.
Lloyds TSB and Halifax are both owned by Lloyds Banking Group, but as they operate under separate banking licences, their credit cards are classed as having separate owners.
Abbey and Alliance & Leicester both belong to Spanish banking giant Santander. Abbey provides its own cards, but Alliance & Leicester cards are issued by MBNA.
Why it matters
So is it really that important to know who owns your plastic? The answer is yes. It's of crucial importance, particularly if you want to take advantage of a balance transfer deal.
Many credit card providers tempt new customers to take out one of their cards by offering 0% interest on debt transferred from other providers.
But, in order to take advantage of the offer, a different group must own the card from which the debt is being transferred.
If you fail to check who owns which card before applying, you may find you can't transfer your balance as planned. Not only does this mean you're back to square one, making multiple credit card applications could damage your credit rating. This could make it more difficult to take out a credit card, loan or mortgage in the future.
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Keeping up with who owns what in the financial services industry is never easy, particularly when it comes to credit cards.
And, it's just got even more confusing thanks to the recent wave of consolidation in the banking sector, creating anomalies where banks have the same parent company but a different credit card provider.
Who owns what?
One of the UK's biggest credit card providers is MBNA Europe Bank.
As well as offering its own-brand credit cards, it also provides plastic for:
• Alliance & Leicester
• Virgin Money
• Smaller building societies
• 400 affinity cards including Manchester United, Liverpool Football Club, the WWF and the British Heart Foundation
Barclaycard
Barclaycard are also a major card issuer after acquiring Discover Financial Services' UK credit card portfolio last year. While most of us may not have heard of Discover before, many of its brands are household names, such as Goldfish, Morgan Stanley and the Caravan Club.
Barclaycard has since rebranded all these cards to contain the Barclaycard name, but also provides a number of cards for third parties including Sky, Thomas Cook, Argos, Bhs and Hilton Hotels.
Multiple brands
A number of banks operate cards under several of their own brand names:
• The Royal Bank of Scotland has credit cards bearing its own name and NatWest's, as well as Mint.
• The Bank of Ireland provides credit cards for the Post Office, as well as their own brand.
• HBOS offers credit cards under both the Halifax and Bank of Scotland names, in addition to more than 30 affinity or co-branded cards.
Co-operative Bank
The Co-operative Bank has its own credit card and one under its Smile brand. It also has 18 affinity cards with charities including Amnesty International, Oxfam, the Woodland Trust and the RSPCA.
But who is the owner?
Just because two banks belong to the same banking group, doesn't mean it's safe to assume their credit cards have the same owner.
Lloyds TSB and Halifax are both owned by Lloyds Banking Group, but as they operate under separate banking licences, their credit cards are classed as having separate owners.
Abbey and Alliance & Leicester both belong to Spanish banking giant Santander. Abbey provides its own cards, but Alliance & Leicester cards are issued by MBNA.
Why it matters
So is it really that important to know who owns your plastic? The answer is yes. It's of crucial importance, particularly if you want to take advantage of a balance transfer deal.
Many credit card providers tempt new customers to take out one of their cards by offering 0% interest on debt transferred from other providers.
But, in order to take advantage of the offer, a different group must own the card from which the debt is being transferred.
If you fail to check who owns which card before applying, you may find you can't transfer your balance as planned. Not only does this mean you're back to square one, making multiple credit card applications could damage your credit rating. This could make it more difficult to take out a credit card, loan or mortgage in the future.
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Monday, October 12, 2009
Payment Tunnels!
When it comes to online payments and the use of credit cards generally online or simply put on the Internet, what bothers me most is security and acceptability of my cards. Merchants all over the world have preferences when it comes to countries and banks that issue credit cards. In other words, they are selective.
Nigerian banks have had to battle this issue over the years and still do. Credit cards issued by banks in Nigeria are often time refused by merchants due to reasons bothering on trust and security. I have had many of my requests turned down on so many occasions because of my location and the credibility of the bank that issues it. I use the GT BANK MasterCard for instance and each time I tried in the past to fund my accounts on a book maker page or even make a payment with my card, I always get turned down!
What then is the way out? Should I continue to miss the great opportunities there are online simply because some merchants some where doesn’t like my card or feels unsecured about the genuiness of my claim to be the rightful owner of the card? No, there must be a way out of it. I got to make money and legitimately too and I can’t die trying to pay when I know that my intentions are genuine. In my desire to find a way out, I stumbled at a site called click2pay! Yes, click2pay. They help you shield your card and in the process provide two services that in the end bring peace and satisfaction to the card issuer and the card owner.
Click2pay acts as a go between. When you get to their site, you register, they give you a call to confirm your telephone number and after this is done, you are granted access to use their site to make payment with your credit card. In summary, your card is not seen by the merchant and no security risk is taking.
The other thing they help you do is shield the name and location of the issuing bank and that ends the issue of discrimination and rejection you have been facing all the while.
Apart from click2pay, you also have clickandbuy and the one Nigerians are very familiar with, Graphcard among others. I mean, online payments haven’t been this easy over the years.
Comments and suggestions are welcomed!
Nigerian banks have had to battle this issue over the years and still do. Credit cards issued by banks in Nigeria are often time refused by merchants due to reasons bothering on trust and security. I have had many of my requests turned down on so many occasions because of my location and the credibility of the bank that issues it. I use the GT BANK MasterCard for instance and each time I tried in the past to fund my accounts on a book maker page or even make a payment with my card, I always get turned down!
What then is the way out? Should I continue to miss the great opportunities there are online simply because some merchants some where doesn’t like my card or feels unsecured about the genuiness of my claim to be the rightful owner of the card? No, there must be a way out of it. I got to make money and legitimately too and I can’t die trying to pay when I know that my intentions are genuine. In my desire to find a way out, I stumbled at a site called click2pay! Yes, click2pay. They help you shield your card and in the process provide two services that in the end bring peace and satisfaction to the card issuer and the card owner.
Click2pay acts as a go between. When you get to their site, you register, they give you a call to confirm your telephone number and after this is done, you are granted access to use their site to make payment with your credit card. In summary, your card is not seen by the merchant and no security risk is taking.
The other thing they help you do is shield the name and location of the issuing bank and that ends the issue of discrimination and rejection you have been facing all the while.
Apart from click2pay, you also have clickandbuy and the one Nigerians are very familiar with, Graphcard among others. I mean, online payments haven’t been this easy over the years.
Comments and suggestions are welcomed!
Sunday, October 11, 2009
What Constitutes a Credit Card Risk?
This refers to the risk of the merchant to incur "charge backs" or disputes, from their customers. Charge backs are not related to charges or credits, but are rather referred to an unhappy customer initiating a dispute of a charge that has shown up on his statement.
These disputes consist of the customer indicating that the charge was false or that their card number was misappropriated by another individual and used for purchases that were not approved. In some cases, the charge back isn't initiated by the individual cardholder but instead by the card-issuing bank. Once a charge back is initiated, the merchant is generally sent a "retrieval request" which is just a request by the card acquiring (or underwriting) bank for the proof of the sale. This proof would usually consist of copies of the signed receipt and any other signed corroborating documents that the merchant might have. The merchant's proof is weighed against the cardholder's dispute and then the banks will determine whose position is more valid.
Another reason why cardholders initiate charge backs is when merchandise purchased was actually less in quality in contrast to agreement. If the merchandise is a custom built item or a service, the customer generally knows that they cannot return it and receive a credit. So instead they will initiate a charge back to attempt to get their money back. It is important to remember that anyone can initiate a charge back for any stated reason, but this doesn't mean that they will win.
When evaluating a prospective business for charge back risk, the underwriting bank will in ost cases look at as many factors as they have access to. Normally it includes industry type, history of the business itself as well as other personal information that can be discovered about the people who run the business.
The risk depends on type of industriesthan. For instance, any business in a nonswiped environment would be considered high risk. That is because when in a swiped environment, the magstripe on the card is read showing that the physical card is in the merchant's hand and the signature can be compared. These fraud risk tools are not available when the sale is conducted over the phone or the Internet. The only tools that the merchant has to indicate whether the card number is stolen are AVS (Address Verification System) and CVV2 (Card Verification Value 2). Other industry types that would have a high ratio of charge backs include custom furniture stores and any business providing future service. This is because many times a customer who has already purchased a custom item or future service might start feeling buyer's remorse before they can take possession of the item or complete the service and so might attempt to recover their funds with a charge back.
When evaluating the particular business, the bank will contact whichever trade references are given in order to ascertain if the business pays their vendors in a timely fashion. The time in business and the length of time left in a location lease is also important because it demonstrates history and stability. The owner's personal credit is also important because it demonstrates the manner in which that individual conducts their personal life and probably the way that they would run their business. Bad personal credit also many times will give the bank a clue as to who might have a high probability for conducting fraudulent business.
On the whole and as time continue to fly, more risk are noticed every day and steps must continue to be made by all stake holders to minimise risk because the possiblities of totally wiping out risks involved in credit card is almost impossible.
Comments are welcomed.
These disputes consist of the customer indicating that the charge was false or that their card number was misappropriated by another individual and used for purchases that were not approved. In some cases, the charge back isn't initiated by the individual cardholder but instead by the card-issuing bank. Once a charge back is initiated, the merchant is generally sent a "retrieval request" which is just a request by the card acquiring (or underwriting) bank for the proof of the sale. This proof would usually consist of copies of the signed receipt and any other signed corroborating documents that the merchant might have. The merchant's proof is weighed against the cardholder's dispute and then the banks will determine whose position is more valid.
Another reason why cardholders initiate charge backs is when merchandise purchased was actually less in quality in contrast to agreement. If the merchandise is a custom built item or a service, the customer generally knows that they cannot return it and receive a credit. So instead they will initiate a charge back to attempt to get their money back. It is important to remember that anyone can initiate a charge back for any stated reason, but this doesn't mean that they will win.
When evaluating a prospective business for charge back risk, the underwriting bank will in ost cases look at as many factors as they have access to. Normally it includes industry type, history of the business itself as well as other personal information that can be discovered about the people who run the business.
The risk depends on type of industriesthan. For instance, any business in a nonswiped environment would be considered high risk. That is because when in a swiped environment, the magstripe on the card is read showing that the physical card is in the merchant's hand and the signature can be compared. These fraud risk tools are not available when the sale is conducted over the phone or the Internet. The only tools that the merchant has to indicate whether the card number is stolen are AVS (Address Verification System) and CVV2 (Card Verification Value 2). Other industry types that would have a high ratio of charge backs include custom furniture stores and any business providing future service. This is because many times a customer who has already purchased a custom item or future service might start feeling buyer's remorse before they can take possession of the item or complete the service and so might attempt to recover their funds with a charge back.
When evaluating the particular business, the bank will contact whichever trade references are given in order to ascertain if the business pays their vendors in a timely fashion. The time in business and the length of time left in a location lease is also important because it demonstrates history and stability. The owner's personal credit is also important because it demonstrates the manner in which that individual conducts their personal life and probably the way that they would run their business. Bad personal credit also many times will give the bank a clue as to who might have a high probability for conducting fraudulent business.
On the whole and as time continue to fly, more risk are noticed every day and steps must continue to be made by all stake holders to minimise risk because the possiblities of totally wiping out risks involved in credit card is almost impossible.
Comments are welcomed.
Thursday, October 1, 2009
The history of credit cards started as far back as the 18th century and and in the year 1730, one Christopher Thompson who was a furniture maker and merchant started what would be called the first advert by giving opportunity to those who would by and pay of weekly.This gave room for those who could not buy the BIG TICKETS items to buy and pay regularly till full payments are made.
The rise of the British middle class then came, Bankers introduced the idea of overdraft protection. This was a sought of consumer credit, because it was really a type of loan that kicked in automatically if an account didn’t have enough money in it to cover the checks written against it.
The system of credit took a real turn in 1914, when Western Union, in the interest of good customer service, gave some of their more prominent customers a metal card to be used in deferring payments – interest free – on services used. This system became known as “Metal Money”.
Enter another company who realized the value of making goodwill gestures to their customers. General Petroleum Corporation issued the first metal money in 1924 specifically for gasoline and automotive services. First to their employees, then to select customers and then, because the system seemed to work so well, to the general public.
The Ford Motor Company played a large part in creating the consumer credit business. Just like Christopher Thompson back in 1730, Ford recognized that not all Americans had enough savings to buy a Model T. Even those who did have enough might not want to put their whole life-savings into just a car. So Small Loan Companies, or Finance Companies, began making their first car loans.
1950,saw the real beginning of the credit card most of us are know today. Diner’s Club, Inc. introduced the first credit card that could be used at a variety of stores and businesses. This card was established primarily for businessmen to use for travel and entertainment expenses. The Diner’s Club gave its cardholders up to 60 days to make payment in full. Merchants were eager to accept the card because they found that credit card customers usually spent more if they were able to “charge it”.
The first bank to implement this system was the Franklin National Bank in New York. In 1951, after screening applicants, they issued the Charge-It card to those approved for credit. This card could be used by consumers at local retail establishments. It worked much like the credit card systems of today – the consumer made a purchase using the card; the retailer obtained authorization from Biggins Bank, and closed the sale. The Bank reimbursed the retailer and collected the debt from the consumer at a later date.
What a great idea for everybody involved! Other banks saw the same potential. In 1958, the “Don’t leave home without it” card was introduced by American Express. But the first revolving-credit card was issued in the State of California by the Bank of America. The BankAmericard, marketed all across the state, was the first card to offer its cardholders payment options, where they could pay the debt in full or they could make monthly payments while the banks charged interest on the remaining balances.
In 1965, Bank of America saw more opportunity for income and the need for control, so licensing agreements were issued to banks of all sizes across America. These agreements allowed other banks to issue BankAmericards and to interchange transactions through issuing banks. Now everyone was getting stuck on the act!
All these credit card systems needed some regulation!
The credit card industry was booming! But some kind of regulation became necessary. Charge card issuing and processing became too large of a task for the banking industry to handle. In 1966, fourteen US banks had formed Interlink, an association with the ability to exchange information on credit card transactions. In 1967, four California banks had formed the Western States Bancard Association and introduced the MasterCharge program to compete with the BankAmericard Program. By 1969, most independent bank charge cards had been converted over to either BankAmericard or Master Charge cards.
As the bankcard industry grew, banks interested in issuing cards became members of either BankAmericard or MasterCharge. Their members shared card program costs, making the bankcard program available to even small financial institutions.
By the mid 1970s, the credit card industry started exploring international waters. But the name “America” caused some problems. So, in 1977, BankAmericard became VISA. Then in 1979,MasterCard followed suit.
In 1979, with the improvement of electronic processing, electronic dial-up terminals and magnetic stripes on the back of credit cards allowed retailers to swipe the customer’s credit card through the dial-up terminal, which accessed issuing bank cardholder information. The advantage of this system, besides saving paper, was the increased speed of processing authorizations – one to two minutes. It also decreased credit card fraud.
Toda, we have five major leaders in the field and these are:
Visa International
MasterCard
American Express
Discover
Diner’s Club
This piece on the Genesis of the credit card will continue.Remember, all comments and observations are welcomed!
The rise of the British middle class then came, Bankers introduced the idea of overdraft protection. This was a sought of consumer credit, because it was really a type of loan that kicked in automatically if an account didn’t have enough money in it to cover the checks written against it.
The system of credit took a real turn in 1914, when Western Union, in the interest of good customer service, gave some of their more prominent customers a metal card to be used in deferring payments – interest free – on services used. This system became known as “Metal Money”.
Enter another company who realized the value of making goodwill gestures to their customers. General Petroleum Corporation issued the first metal money in 1924 specifically for gasoline and automotive services. First to their employees, then to select customers and then, because the system seemed to work so well, to the general public.
The Ford Motor Company played a large part in creating the consumer credit business. Just like Christopher Thompson back in 1730, Ford recognized that not all Americans had enough savings to buy a Model T. Even those who did have enough might not want to put their whole life-savings into just a car. So Small Loan Companies, or Finance Companies, began making their first car loans.
1950,saw the real beginning of the credit card most of us are know today. Diner’s Club, Inc. introduced the first credit card that could be used at a variety of stores and businesses. This card was established primarily for businessmen to use for travel and entertainment expenses. The Diner’s Club gave its cardholders up to 60 days to make payment in full. Merchants were eager to accept the card because they found that credit card customers usually spent more if they were able to “charge it”.
The first bank to implement this system was the Franklin National Bank in New York. In 1951, after screening applicants, they issued the Charge-It card to those approved for credit. This card could be used by consumers at local retail establishments. It worked much like the credit card systems of today – the consumer made a purchase using the card; the retailer obtained authorization from Biggins Bank, and closed the sale. The Bank reimbursed the retailer and collected the debt from the consumer at a later date.
What a great idea for everybody involved! Other banks saw the same potential. In 1958, the “Don’t leave home without it” card was introduced by American Express. But the first revolving-credit card was issued in the State of California by the Bank of America. The BankAmericard, marketed all across the state, was the first card to offer its cardholders payment options, where they could pay the debt in full or they could make monthly payments while the banks charged interest on the remaining balances.
In 1965, Bank of America saw more opportunity for income and the need for control, so licensing agreements were issued to banks of all sizes across America. These agreements allowed other banks to issue BankAmericards and to interchange transactions through issuing banks. Now everyone was getting stuck on the act!
All these credit card systems needed some regulation!
The credit card industry was booming! But some kind of regulation became necessary. Charge card issuing and processing became too large of a task for the banking industry to handle. In 1966, fourteen US banks had formed Interlink, an association with the ability to exchange information on credit card transactions. In 1967, four California banks had formed the Western States Bancard Association and introduced the MasterCharge program to compete with the BankAmericard Program. By 1969, most independent bank charge cards had been converted over to either BankAmericard or Master Charge cards.
As the bankcard industry grew, banks interested in issuing cards became members of either BankAmericard or MasterCharge. Their members shared card program costs, making the bankcard program available to even small financial institutions.
By the mid 1970s, the credit card industry started exploring international waters. But the name “America” caused some problems. So, in 1977, BankAmericard became VISA. Then in 1979,MasterCard followed suit.
In 1979, with the improvement of electronic processing, electronic dial-up terminals and magnetic stripes on the back of credit cards allowed retailers to swipe the customer’s credit card through the dial-up terminal, which accessed issuing bank cardholder information. The advantage of this system, besides saving paper, was the increased speed of processing authorizations – one to two minutes. It also decreased credit card fraud.
Toda, we have five major leaders in the field and these are:
Visa International
MasterCard
American Express
Discover
Diner’s Club
This piece on the Genesis of the credit card will continue.Remember, all comments and observations are welcomed!
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