Every person who has a bank card knows that he can use it not only for withdrawing cash from an ATM, but also for non-cash payments in stores. The possibility of using the second option is provided thanks to payment systems – they act as a link between the bank and the store at the time of payment. One of the most popular is MasterCard, an international payment system.
history of the company
The birth year of bank cards is considered 1951, when the American Franklin National Bank offered its customers paper documents that could be used in local stores to pay for goods. This was the first experience of cashless payments. In 1966, several US banks with their own payment cards founded the Payment Card Association, which later became known as MasterCard International. The goal of the association was to create a single universal payment instrument for several financial institutions. Today MasterCard is a world famous brand that occupies about 20% of the world’s payment market.
Activities in Europa
During the first years of its existence, MasterCard mainly operated in the United States and in some countries of Western Europe. Full-scale international expansion began in the 80s of the 20th century. In 1980, the first payment cards appeared on the territory of the Europe, but did not gain wide popularity. Today Europa is one of the most promising areas in the company’s development, where it occupies about 38% of the payment market. All major banks in the country are the issuers of its plastic cards. The total number of MasterCard payment instruments in the hands of Europeans exceeded 27 million units.
Next, let’s consider what MasterCard WorldWide is for the average person who goes to the store, travels the world or orders goods over the Internet. Each bank, issuing a card, binds it to some payment system, on which the possibility of using plastic outside the issuer’s service offices largely depends.
When a payment instrument is used to pay for an item in a store, the following process occurs:
- The merchant’s payment terminal reads information from the buyer’s card and sends a request for the purchase amount to its acquiring bank.
- The request is sent to the payment system to which the plastic belongs.
- In turn, the PS transmits information to the bank where the buyer’s current account is located.
- If the PIN-code coincides, the bank reserves the purchase amount on the client’s account and then transfers it to the merchant in the acquiring bank through the same payment system.
Thus, acquiring banks that accept cashless payments in stores do not need to directly contact the buyer’s financial institution to receive the purchase amount. This task will be undertaken by the international payment system MasterCard.
Varieties of cards
Bank cards MasterCard provide their holders with maximum financial freedom in many countries of the world. Depending on the category of plastic, you can use special offers, bonus programs of the payment system, or get a discount on goods and services of its partners. With World Elite or Black Edition premium cards, you get access to business lounges for MasterCard clients at the international airports of Vienna, Prague, Moscow, Budapest, Kiev and Bucharest.
Currently, banks with the MasterCard logo issue the following types of payment instruments:
- Standard – only the necessary set of features at the minimum cost of annual maintenance;
- Gold – priority service and access to special offers worldwide;
- Platinum – service in the hall for VIP clients, a personal manager, as well as special offers for premium clients;
- World is a special type of map created for wide use all over the world with unique features and high-level service;
- Black Edition – unique design and privileges that meet the requirements of the most demanding users with high material wealth;
- World Elite is a prestigious MasterCard bank card designed for top managers and company owners.
All of the above payment instruments can be obtained from partner banks .
- all precautions were taken to ensure the confidentiality of card data, the PIN code or the confirmation code of online transactions was not communicated to outsiders;
- after the loss or theft of a payment instrument, the user immediately reported this to his bank or via the hotline to MasterCard.
However, the “zero liability” guarantee does not apply to unauthorized prepaid gift card transactions.
You can freely use your MasterCard online bank card for purchases in online stores. The security of such transactions is ensured by SecureCode technology – confirmation of online transactions using one-time passwords sent to the cardholder’s mobile phone during the purchase process. The one-time password serves as a means of authenticating the client.
SecureCode technology is supported by more than 350,000 online stores around the world, and in order to make purchases with confirmation using one-time passwords, it is enough to connect your bank’s SMS service to the payment instrument using your mobile phone number.
In case of loss or theft of a card, we usually call the contact center of our bank to block it. However, this issue can be resolved by the MasterCard hotline in Europa, if you call the toll-free number 8-800-555-0269. While abroad, call your local MasterCard Contact Center, or if not available, contact US-based Global Support at 1-636-722-71-11 (free from landlines). In this case, you can:
- get advice from a specialist speaking your native language;
- report the loss of the card and block it;
- order an urgent re-release;
- apply for an emergency cash advance.
In addition to its own brand, the MasterCard system has several proprietary ones. Some of them are well known to Europeans:
- Maestro is a debit card service that appeared in 1990. It is issued with a link to a current account or in a prepaid version. Often used to issue instant cards.
- Cirrus is a system for servicing the ATM network.
- Mondex is an electronic payment system for smart cards.
In 2003, MasterCard in the United States tested its bank cards equipped with chips for contactless payments using PayPass technology. They were successful, and the technology became widespread throughout the world. Today, payment instruments that can be paid in one touch are issued by most banks. They are even produced by the services of electronic wallets QIWI Wallet and Yandex.Money.
PayPass technology works only in retail stores and in the service sector, where cashless payments are accepted through terminals. It is not used for online transactions. To pay for the purchase, it is enough to bring the plastic to the upper surface of the terminal for a few seconds. If the transaction amount does not exceed 1000 €, you will not have to enter the PIN code. This is very convenient when making small purchases or paying for public transport.
The term BankNet is little familiar to an ordinary user who cares about the quality, security, convenience and speed of a transaction, rather than being aware of the technical means that ensure these requirements. BankNet is a telecommunications network that links all credit card issuers and processing centers. It is through this network that all transactions made using MasterCard payment instruments go through. Its operations center is located in St. Louis, Missouri, USA.
Pros and cons of the MasterCard system
The following advantages of MasterCard can be highlighted:
- availability of payments in most countries of the world;
- own bonus programs and ways to reward customers;
- the opportunity to receive emergency assistance abroad if the card is lost;
- own business lounges at the airports for holders of premium cards.
The main drawback of the MasterCard payment system, like its main competitor Visa, is its dependence on the political situation and the US authorities. Due to international economic sanctions against Iran, initiated by the US government, for several years the banks of this country were disconnected from the services of the MasterCard system, and their cards were served only by their own ATMs. The return to the Iranian market took place in 2020.
In 2020, MasterCard cut off several European banks from service due to economic sanctions initiated by the US and EU authorities. There was no complete suspension of the payment system in the country, but these measures played against it. In response to the sanctions, the national payment system MIR appeared, which became a competitor to MasterCard in the European market.