VISA

The Visa International Service Association of San Francisco, California, USA, commonly called VISA, is an economic joint venture of 21,000 financial institutions that issue and market Visa products including credit and debit cards.

In 1958, Bank of America launched its pioneering BankAmericard credit card program in Fresno, California. The product idea was that of a bank branch manager, who stopped by a local store and observed clerks in a back room preparing customers' monthly bills. It struck him as inefficient to spend so much time (and money) to prepare and collect bills that were often for paltry amounts, and he wondered if the process could be efficiently centralized, with his bank's computer preparing the bills in off-hours. The original goal of the company was to offer the system across California; however in 1965 the bank began subscribing licensing agreements with a group of banks outside of California. Over the following 11 years, various banks licensed the card system from Bank of America, forming a network of banks backing the BankAmericard system across the United States. [1]
During this same time period, licences for the BankAmericard system also started to be implemented in other countries. For example:
In Canada, an alliance of banks (including Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Banque Canadienne Nationale and Bank of Nova Scotia) issued credit cards under the Chargex name from 1968 to 1977.
In France, it was known as Carte Bleue (Blue Card). The logo still appears on many French-issued VISA cards today.
In the UK, the only BankAmericard issuer for some years was Barclaycard.
In 1970, Bank of America gave up control of the BankAmericard program. The various BankAmericard issuer banks took control of the program, creating National BankAmericard Inc. (NBI), an independent non-stock corporation which would be in charge of managing, promoting and developing the BankAmericard system within the United States, although Bank of America continued to issue and support the international licenses themselves. By 1972, licenses had been granted in 15 countries. In 1974, IBANCO, a multinational member corporation, was founded in order to manage the international BankAmericard program.

1976, the directors of IBANCO determined that bringing the various international networks together into a single network with a single name internationally would be in the best interests of the corporation; however in many countries, there was still reluctance to issue a card associated with Bank of America, even though the association was entirely nominal in nature. For this reason, in 1977 BankAmericard, Chargex, Barclaycard, Carte Bleue, and all other licensees united under the new name, "Visa", which retained the distinctive blue, white and gold flag. NBI became Visa U.S.A., and IBANCO became Visa International.
The term Visa was conceived by the company's founder, Dee Hock. He believed that the word was instantly recognizable in many languages in many countries, and that it also denoted universal acceptance. Nowadays, the term VISA has become a recursive backronym for Visa International Service Association.

Visa offers through its issuing members the following types of cards:
Debit cards (pay from a checking / savings account)
Credit cards (pay monthly payments with interest)
Prepaid cards (pay from a cash account that has no checkwriting privileges)
Visa operates the PLUS ATM network and the Interlink EFTPOS network, which facilitate the "debit" protocol used with debit cards and prepaid cards.
Visa's corporate structure is regionally de-centralised, which is unique in the payment scheme industry.
Legally, Visa comprises four non-stock, separately incorporated companies that employ 6000 people worldwide: Visa International Service Association ("VISA"), the worldwide parent entity; Visa U.S.A. Inc.; Visa Canada Association; and Visa Europe Ltd. The latter three separately incorporated regions have the status of group members of Visa International Service Association, whereas the unincorporated regions (Visa Latin America [LAC], Visa Asia Pacific and Visa Central and Eastern Europe, Middle East and Africa [CEMEA]) are divisions within VISA.
The decentralised nature of Visa allows it to respond to member needs and adapt the Visa International rules and products to suit the individual needs of their regional members. Regional banks therefore have a strong stake in the governance of their region.
The Visa International Board has the dual responsibilities of:
Superintendence of the worldwide interests of the Association
Strategic direction and supervision of the three unincorporated divisions and the central staff of Visa Worldwide services.
The Visa Association is not a profit-driven organisation and the four companies that make up Visa issue no cards and make no loans. Members (about 21,000 worldwide) fund day to day management and make the investments needed to maintain and develop the Visa payment system. Fees are levied according to the following formula:
Operating and Marketing costs
+ Investments in new products, platforms and systems
+ Increase in Reserves
= Members annual fees

Initial public offering
On October 11, 2006, Visa announced that some of its businesses would be merged and become a publicly traded company, Visa Inc.[2][3][4] Under the IPO restructuring, Visa Canada, Visa International, and Visa U.S.A. will be merged into the new public company. Visa's West Europe operation will remain in the hands of its member banks who will have a minority stake in Visa, Inc. [5]

Features of the standard product
Even though the service is offered by thousands of banks, the end result is standardized for consumers by the Visa International Association. Two protocols are used, depending upon the type of card marketed, often called "credit" and "debit."
The debit protocol involves using the card at a point of sale terminal (POS) or automated teller machine where the PLUS or Interlink logo is shown, with a Visa card that has the PLUS or Interlink logo on the back of the card. A PIN (personal identification number, known by its acronym) is used to identify the cardholder. The money is deducted from the attached checking account or prepaid account (which is similar with no paper check-writing capability) or, more commonly, from a current account.
The credit protocol involves using the card at a POS or a banking center where the Visa logo is shown. The cardholder's signature is generally used for identification, often together with the cardholder's civic registration number or ID card/passport. Holders of any Visa card may use the credit protocol even if the card is marketed as a debit card or prepaid card (basically since it has the Visa logo on the front of the card). One source of confusion is the merchant may ask "debit or credit?" even though the words are not defined that way in most dictionaries and even though the card may say "debit card" right on it, and still be available for "credit" transactions. In this way it is a misnomer that the credit cards are only for loans or that the debit protocol is only for checking accounts. Banks actually choose various backend methods of handling the accounts, making "debit" a generic synonym for "Plus/Interlink" (and the equivalent competitive networks), and "credit" a generic synonym for "Visa" (and MasterCard, American Express, Discover Card, which have similar systems).
The names of the two protocols use the arbitrary "debit" and "credit" from accounting meaning left and right, and they originally had the meanings (and still do to many people) that with credit the cardholder pays later for the purchase, and with debit the cardholder pays immediately. The truth today is that they are merely two different protocols, with which there is still considerable confusion, and even lawsuits over the definitions of products for purposes of antitrust law. Banks can use independent methods to actually recover the money paid for purchases, regardless of which protocol is used. For example, the debit protocol can be used to incur a debt to the bank, and the credit protocol can be used to take money from a checking account.
Some outstanding rules of the association include rules about how a cardholder must be identified for security, how transactions may be denied by the bank and how banks may cooperate for fraud prevention, and how to keep that identification and fraud protection standard and non-discriminatory. One notable rule is that no merchant accepting Visa, whether a mom-and-pop store or a government body like a university, may establish any minimum purchase, maximum purchase, or surcharge for any Visa (credit) transaction. They may establish surcharges for debit transactions (although lower fees on debit card transactions means that merchants typically encourage use of debit cards by surcharging more for credit cards, where allowed). However enforcement is by individual banks, who may not know the rules well; so a bank may initially uphold a surcharge or minimum, unless the consumer knows the association rules well. Other rules govern what creates an enforceable proof of authorization by the cardholder (starting from a signature or PIN), and continuing to lower levels of proof such as a shipment accepted or a statement by the consumer. Some countries have banned the no-surcharge rule, most notably the UK[6] and Australia[7] and retailers in those countries may apply surcharges to any credit-card transaction, Visa or otherwise.
Recent complications include the addition of exceptions for non-signed purchases by telephone or on the Internet, and an additional security system called "Verified by Visa" for purchases on the Internet.
The VISA system has been known to decline legitimate charges if it believes that the transactions may be fraudulent. In particular, repeated overseas transactions may be denied.

Logo design
Old logo design

The old Visa and Plus logos.
The blue and gold in Visa's logo were originally chosen to represent the blue sky and golden-colored hills of California, where Bank of America was founded.
The Visa Flag Symbol is used by merchants to denote the acceptance of Visa credit cards. However, the logo is misleading as many merchants, particularly in France, show the logo, but only accept local cards[1].

As of Mid 2006 Visa are removing[8] their trademark "flag" logo from all their cards, websites and retailer's windows. It will be the first time that Visa have changed their logo.
For all credit cards, the new logo will be a simple white background with the name VISA in blue with an orange flick on the 'V' (As Above).
For the new Visa Debit and Visa Electron logo, see the relevant pages.


In 1984, most VISA cards around the world began to feature a hologram of a dove on its face, generally under the last four digits of the VISA number. This was implemented as a security feature - true holograms would appear 3-dimensional and the image would change as the card was turned. At the same time, the VISA logo, which had previously covered the whole card face, was reduced in size to a strip on the card's right incorporating the hologram. This allowed issuing banks to customize the appearance of the card. Similar changes were implemented with MasterCard cards.
On most Visa cards, holding the face of the card under an ultraviolet light will reveal the dove picture, as an additional security test.
Beginning in 2005, the VISA standard was changed to allow for the hologram to be placed on the back of the card, or to be replaced with a holographic magnetic stripe ("holomag").[9]

Olympics
Since the 1988 Calgary Winter Olympic Games, as a worldwide Olympic partner, Visa is the only form of electronic payment accepted at all venues and Olympic-related transactions. Its current contract with the IOC as the exclusive payment card will continue through 2012.

Others
VISA is currently the shirt sponsor for the Argentina national rugby union team, nicknamed the Pumas. Also, VISA sponsors the Copa Libertadores and the Copa Sudamericana, the most important football club tournaments in South America.
Until 2005, VISA was the exclusive sponsor of the Triple Crown thoroughbred tournament.
In 2006/7, VISA is the sponsor of the Centennial Park Moonlight Cinema, located in Sydney, Australia
Visa is sponsoring the 2007 Rugby World Cup
It replaces Mastercard as a FIFA sponsor and will be the official card of the 2010 FIFA World Cup in South Africa


Visa settled a lawsuit to Wal-Mart for billions of dollars. According to a website associated with the suit [10], Visa and MasterCard settled their claims for a total of $3.05 billion, and Visa's share of this settlement is reported to have been the larger. As of the spring of 2005, it is expected to have raised its interchange rate from 1.634% to 1.99%, which can be expected to affect the discount rates paid by retail locations to the banks with which they deal.
It has been rumored for years that Visa and MasterCard have been working in tandem for a long time; In fact, while most card-issuing banks in the United States are members of both Visa and MasterCard, the associations are distinct, and have some key differences. The United States Department of Justice unsuccessfully sued the two associations over allegations that their common ownership was detrimental to competition. The United States Department of Justice was successful with claims brought at the same time against both companies under the Sherman Antitrust Act for preventing banks from issuing American Express cards. In late 2004, the Supreme Court declined to reconsider a lower court's ruling and thereby cleared the way for MasterCard- and Visa-issuing banks to begin issuing American Express and Discover cards. Subsequently, several major issuers like MBNA and Citibank have begun issuing American Express cards, in addition to Visa and MasterCard.

MasterCard Worldwide (NYSE: MA) is a mutinational corporation based in Purchase, NY in the United States. Throughout the world, its principal business is to process payments between the banks of merchants and the banks of purchasers that use its "Mastercard" branded debit- and credit cards to make purchases. Mastercard Worldwide has been a publicly traded company since 2006. Prior to its initial public offering, Mastercard Worldwide was a membership organization owned by the 25,000+ financial institutions that issue its card.
It was originally created by United California Bank (later First Interstate Bank, subsequently merged into Wells Fargo Bank), Wells Fargo, Crocker National Bank (also subsequently merged into Wells Fargo), and the Bank of California (subsequently merged into the Union Bank of California) as a competitor to the BankAmericard issued by Bank of America. BankAmericard is now the VISA credit card, issued by Visa International.

History
The name Master Charge was licensed by the above mentioned California banks from the First National Bank of Louisville, Kentucky in 1967. With the help of New York's Marine Midland Bank, now HSBC Bank USA, these banks joined with the Interbank Card Association (ICA) to create "Master Charge: The Interbank Card".
In 1979, "Master Charge: The Interbank Card" was renamed simply "MasterCard". In the early 1990s MasterCard bought the British Access card and the Access name was dropped. In 2002, MasterCard International absorbed Europay International SA, another large credit-card issuer association, which for many years issued cards under the name Eurocard.
In 2006, MasterCard International underwent another name change to MasterCard Worldwide. This was done in order to suggest a more global scale of operations. In addition, the company introduced a new corporate logo adding a third circle to the two that had been used in the past (the familiar card logo, resembling a Venn diagram, remains unchanged). A new corporate tagline was introduced at the same time: "The Heart of Commerce".[1]

MasterCard's current advertising campaign is "There are some things money can't buy. For everything else, there's MasterCard."
The first of these Priceless ads was run during the World Series in 1997 and there are numerous different TV, radio and print ads.[4] It was created by McCann-Erickson. MasterCard actually registered Priceless as a trademark.[5] Actor Billy Crudup has been the voice of the ads in the USA since 1997. In other countries the voiceover artist changes to suit the local market; in the UK, for instance, actor Jack Davenport is the voice.
This campaign attempts to position MasterCard as the friendly credit card company with a sense of humor. They are designed to respond to the public's worry that everything is being commodified, and that people are becoming too materialistic.[6] Many parodies have been made using this same pattern, especially on Comedy Central, though MasterCard has threatened legal action,[7] contending that MasterCard views such parodies as a violation of its rights under the federal and state trademark and unfair competition laws, under the federal and state anti-dilution laws, and under the Copyright Act. Despite these claims, however, noted US consumer advocate and presidential candidate Ralph Nader emerged victorious (after a four-year battle) in the suit MasterCard brought against him after he produced his own "Priceless" political commercials.[8]
During Super Bowl XXXIX on 6 February 2005, a MasterCard commercial was introduced featuring 10 legendary advertising characters from various foods and household products. The characters included Chef Boyardee, Charlie the Tuna, the Pillsbury Doughboy, Count Chocula, the Vlasic pickle stork, the Morton Salt girl, the Jolly Green Giant, Mr. Peanut from Planters, the Gorton's fisherman, and Mr. Clean.

MasterCard currently sponsors the New Zealand All Blacks, the country's world famous rugby union team.[9]
MasterCard also sponsors the UEFA Champions League. For many years, it also sponsored FIFA World Cup but withdrew its contract after a court settlement and its rival Visa took up the contract in 2007 [1].
It is currently the sponsor of the Memorial Cup Tournament of the Canadian Hockey League. MasterCard has just announced new sponsorship deal with Australian Cricket team.
In 1997, MasterCard was the main sponsor of the aborted MasterCard Lola Formula One team.

MasterCard operates Banknet, a global telecommunications network linking all MasterCard card issuers, acquirers and data processing centers into a single financial network. The operations hub is located in St. Louis, Missouri.
MasterCard's network is significantly different from Visa's. Visa's is a star based system where all endpoints terminate at one of several main data centers, where all transactions are processed centrally. MasterCard's network is an edge based, peer-to-peer network where transactions travel a meshed network directly to other endpoints, without the need to travel to a single point. This allows MasterCard's network to be much more resilient, in that a single failure cannot isolate a large number of endpoints.