What is Mastercard? We’ve gotten this question from newcomers on this portal. Here we have taken out time to explain all you need to know about Master Cards.
One striking feature of the MasterCard is that regardless of the issuing financial institution or card type, customers can use them at any business that accepts their credit or debit cards.
The company makes transactions (whether buying or selling, fund transfer) more convenient for the customer because the stress of having to identify with a particular financial institution is reduced.
Thus consumers can transact business any day, anytime and anywhere as long there is a “MasterCard” involved.
Cards are available to individual customers and to small, mid-size and large businesses with a variety of needs and credit history.
What is Mastercard?
Mastercard Incorporated is an American multinational financial corporation that works with financial institutions to issue credit cards.
The principal business of the company all over the world is to process payments between the banks of merchants and the card issuing banks or credit union of the purchasers who use the brand debit and credit cards to make purchases.
The Company has been a publicly traded company since 2006.
The Company does not actually issue any credit cards directly; they rely on banks in various countries to issue credit cards that utilize these payment methods.
Therefore, the interest rates, rewards, annual fees and all other charges are issued by the financial institutions, thus any bill paid goes directly to the issuing financial institution.
How Mastercard Works?
MasterCard is neither an issue nor an acquirer; the corporation’s role is to provide the technology and the network that powers the transactions.
- When a customer purchases goods/services from a merchant e.g Amazon, the customer pays with the credit or debit Card.
- The point-of-sale system captures the customer’s account information and securely sends it to the merchant bank, an authorization is gotten from the customer’s issuing bank.
- Authorization is required: MasterCard submits the transaction to the issuer for authorization, an authorization for the transaction is given by the issuing bank, and the response is routed to the merchant.
- Payment of merchant: The issuing bank wires the payment to the merchant’s acquirer who deposits the payment into the merchant’s account. Notification is sent to your email account as transactions are made.