MasterCard is an international company that processes many of Australia’s credit cards.
Payment processors allow payments to be made between customers and shops that use different banks, and without these companies credit card transactions are impossible.
MasterCard entered Australia in the 1980s, after the credit card market had already developed. It is a Californian company, although its shares are traded on the New York Stock Exchange. Between the 1960s and 2006 MasterCard was a co-operative owned and run by the financial institutions who issued the card.
MasterCard is accepted by around 28 million different vendors around the world. This is marginally less than VISA, but it is considerably more than any other credit card network.
MasterCard and its arch-rival VISA both started in California, and MasterCard started as a competitor with the predecessor of VISA, which was then the Bank of America card. A number of banks joined together to offer it including Crocker National Bank and Wells Fargo. The card was offered in common and the Intercard Charge Association was founded to run the card. The name Master Charge came about when the Midland Marine bank in New York took it out of California. It changed its name again in 1979 when it became the MasterCard.
In Australia the market was dominated by Bankcard which like MasterCard was a co-operative venture of large banks, in this case of large Australian banks. By the mid-1980s the card had five million customers. MasterCard in the 1980s offered credit cards through the smaller Australian banks and credit unions. Visa and MasterCard now dominate the Australian market for both credit cards and debit cards.
MasterCard has its own payment network, which is known as Banknet. This is an interconnected group of computers that is organised in much the same way as the internet is. The flexible way in which the MasterCard network is built is designed so that the system is more likely to be operating if the telephone network breaks down.
MasterCard has advanced fraud detection and prevention facilities that aim to find unusual transactions for the card holder and report on them. This is often in addition to bank systems that are designed to spot fraud. MasterCard has been active in introducing chips into its cards to make them compatible with a chip and pin system.
This activity is back stopped by a zero liability guarantee which means that the any unauthorised transactions will not be charged to a card holder as long as the transaction is reported as soon as possible.
