What is MasterCard?

MasterCard Worldwide is a multinational company with its headquarters in New York, United States of America. Its main business is to manage a network of widely accepted credit cards which include MasterCard. It does so by processing payments between the purchaser and the banks.

History of MasterCard

MasterCard was initially known as MasterCharge. It was formed by many Californian banks to compete with the BankAmericard issued by Bank of America. This card is now popularly known as Visa credit card.

MasterCharge, the first credit card, was created in 1966. It initially served customers only in America but it soon spread its services to other countries as well. It came to be known as MasterCard in 1979. It is now a public company traded on the New York Stock Exchange.

MasterCard - The Working

The working of MasterCard is no different from other credit cards. It provides access to credit and hence the user can make purchases or pay bills without having to pay at once.

The credit limit is determined when the user receives the MasterCard and it depends on the earnings of the user. An annual percentage rate (APR) is also charged on the card. It is the interest charged on the purchases made. The user has to pay a minimum amount of the credit balance each month. He can also pay off the balance amount at once.

Types of cards offered by MasterCard

MasterCard offers a wide variety of credit cards keeping in mind the different requirements of various people. There is a credit card for everybody right from a teenager who is just starting to use one or people working for big companies.

Their Standard MasterCard is generally advised for people who are first time users. Gold and Platinum MasterCards are for people who are regular with their payments and look for more benefits and services with their cards. The World and World Elite MasterCards are for people who along with the standard features of the card look for reward points and more flexibility.

Important Master Cards

MasterMoney

MasterMoney is the brand of MasterCard debit card used in North America. It is very similar to other debit cards. It can be used as an ATM card and as a credit card as long as there is enough funds in the users account to complete a transaction.

PayPass

This is also a debit card. The unique feature of this is that it is a "contactless” form of payment wherein the cardholder does not have to swipe the card for making the payment. Instead the user has to tap a payment card or other payment device, such as a phone or key fob.

Other Master Card Operations

Banknet

Banknet is a global telecommunications network operated by MasterCard. It links all the MasterCard issuers, acquirers and data processing centers into a single financial network.

The centre of operations is located in St. Louis, Missouri. Banknet uses the ISO 8583 protocol.

EPS-Net

EPS-Net is a network operated by MasterCard Europe. EPS–Net is used to link Issuers and Acquirers for Online POS/ATM Transaction Processing.

MasterCard’s network is more flexible and durable than Visa’s. This is because the network of MasterCard’s is very different from Visa’s. Visa has a star based network system where all endpoints terminate at one of several main data centers, where all transactions are processed centrally. The network of MasterCard is an edge based, peer to peer network. The transactions travel a meshed network directly to other endpoints, without the need to travel to a single point. A single failure cannot separate a large number of endpoints. Hence MasterCard’s network is more flexible.

Advantages of using MasterCard

1. Zero Liability- In case a credit card is stolen or lost, the user does not have to pay for unauthorized purchases.
2. Acceptability- MasterCards are accepted worldwide. All business establishments and ATMs accept MasterCard.
3. Special features-Gold or Platinum cards offer more benefits to the user which includes insurance and warranty programs for purchases.
4. Credibility- On using a MasterCard sensibly a good credit history can be established. This can favourably affect the chance of receiving car loans and mortgages.

MasterCards give their cardholders security, convenience and control. There is a wide variety of cards to choose from. Thus the user tends to gain maximum benefits. Incase you are looking for one; MasterCard is the right one for you!