What’s the point of Visa and Mastercard if it’s always from a bank? AmEx cards are produced and processed by them only and not any other processor, so why can’t banks make credit cards without Visa or Mastercard, or vice-versa?

Question

What’s the point of Visa and Mastercard if it’s always from a bank? AmEx cards are produced and processed by them only and not any other processor, so why can’t banks make credit cards without Visa or Mastercard, or vice-versa?

In: 942

Answer 1

Banks can issue non-Visa/MC cards. There are Amex cards issued by other banks– Wells Fargo and Credit One both have an Amex card in their portfolios. Discover is the same way, the majority are issued by them, but other banks can use them for credit/debit networks. In fact, Discover’s ATM/debit network (Pulse) is pretty common, even for banks whose debit cards are Visa/MC branded.

EDIT: Also, Visa and MC both started out as bank exclusive card networks– Visa was originally BankAmericard, and MC was originally Master Charge and was run by Citi IIRC to compete with BofA. They started licensing it to other banks, and eventually that business got large enough that the card networks were spun off into independent companies.

Even Discover had a start somewhat like that–they originated in Sears’ store credit division. My grandmother who was a Discover customer from launch only was one because her Sears credit account got converted to Discover in the 80s.