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Ever wondered why different credit
cards, payment cards and debit cards issued by different
banks bear same logos such as Visa and Mastercard? Visa,
Mastercard and all other logos represent the type of
credit card association where the issuing bank is a
member.
At present, there are lots of known types of credit card
associations, namely Visa, Mastercard, American Express,
Discover, JCB and Diners Club. Among these members of
credit card association, Visa tops them all. Visa is
considered the largest of all in terms of customers
served. Mastercard ranks only second to Visa, while
American Express ranks the third.
Credit card associations are entities formed to promote
credit through credit card issuance. These credit card
associations, however, do not issue credit cards nor
extend credit to consumers directly. |
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| Credit card associations offer
their services and products to their clients, a network
of financial institutions. Then these financial
institutions are the ones who manage card holder's or
consumer's relationship, interest rates, fees and other
policies.That is why, even though credit cards were
issued by different banks, they bear the Visa logo, for
example. Primarily because both banks that issue the
credit cards are members of Visa. It may also happen
that same issuing bank may offer both Visa and
Mastercard as their line of credit cards.
Yes it is possible that a financial institution can be a
member of both credit card association, but separate
management will handle its daily operation. For example,
a certain bank is a member of both Visa and Mastercard
cards, it is possible, but the rules that apply to Visa
applications will be different from Master card rules.
Also if a bank is a member of both associations, it is
not allowed to serve on the board of directors of both
the credit card association. Member banks of credit
association vote for their respective board of directors
to appoints the credit card associations.
After which, member banks has the sole discretion and is
responsible for setting up interest rates, freebies,
rewards and other features. Credit card associations
acquire their income from payment of membership fees by
member banks. Member banks pay membership fees to these
associations to get license or permission to issue
credit cards. A member bank may be an issuer or an
acquirer and in most cases may be both. An issuing bank
is the one that issue credit cards to end consumers.
While a member bank acts as an acquirer when it accepts
payment on behalf of the merchant for transactions made
using another credit card.
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