What is MasterCard? MasterCard is a credit card processing company that was founded in 1985 by Robert Kiyosaki and John Swados. It is the world’s largest card processor.
MasterCard Incorporated is an American international financial corporation headquartered in the Mastercard International headquarters in Purchase, New York, United States. The Global Operations headquarters is based in O’Fallon, Missouri, a town of St. Charles County, Missouri.
MasterCard is one of the three prominent American credit-card processors, along with Visa and Discover card processors. MasterCard is not tied to any one card or network for transactions. Rather, it provides a wide range of payment methods including electronic check, credit and debit cards, online access, wireless transactions, and Internet-based transactions between merchants and consumers at a global scale.
Credit and debit transactions between a merchant and a customer happen through a network processing company. That network processing company is referred to as a payment gateway. In layman’s terms, the payment gateway connects the buyer and seller and transfers the money from the buyer to the seller. The role of the MasterCard payment gateway is to approve or deny a transaction, hence, it acts as a gatekeeper for all transactions between a merchant and buyer.
In addition to being the largest credit card processor, MasterCard has also become the second-largest cash carrier, behind only Visa. As of this writing, MasterCard holds over 1 billion dollars worth of secured credit lines. The reason for this is because of the success that MasterCard has experienced in promoting its services. MasterCard has been known to partner with many financial institutions including banks and other financial institutions. Many people believe that these institutions would not open up their books to MasterCard unless they were comfortable with MasterCard’s electronic payment processing services. The fact is that most institutions welcome the opportunity to do business with MasterCard.
Another positive factor of using the Mastercard network processing service is the fact that merchants can accept all major brands of plastic cards. There is no brand preference when it comes to accepting credit and debit cards from their merchants. As a matter of fact, merchants do not have to charge special fees for these cards because they do not require them. This means that both credit and debit cardholders have the opportunity to buy the items that they want to buy without having to pay extra charges.
Merchants have to be careful because some of the services provided by the Mastercard group, such as merchant account processing, are known to cause chargebacks from cardholders. Merchant account chargebacks occur whenever a cardholder disputes a transaction or there is an error made in the credit or debit cardholder chargeback process. Chargebacks can cost merchant’s a lot of money because they have to pay to credit card networks to reverse transactions. In addition, merchants may also suffer from lost revenue because customers may refuse to purchase items or make other purchases if they feel that the price of the item is unreasonable.
However, merchants have a way to fight back against chargebacks and merchant account holders have the right to file a complaint to the Mastercard group if they feel that they have been affected by merchant account cancellations or denied. If a merchant receives a complaint, he or she has two options – he or she can try to resolve the issue informally with the credit or debit cardholder, or he or she can file a complaint with the Mastercard group about the transactions. It is important to remember that this group does not have a formal consumer complaint handling procedure, so it is up to the merchant to decide whether he or she will pursue a complaint or whether the situation will just pass and go away. Many merchants find that it is best to just deal with the credit or debit cardholder directly because they can more easily ensure a positive outcome through a formal complaint.
Because MasterCard allows its members to earn rewards for spending on their accounts, it has become the most popular credit card. It has even earned the nickname “Amex” from people who use it. Members who have multiple credit cards can qualify for a maximum rebate when they spend a certain amount. Merchants and their sales representatives are able to earn more when they receive a high level of referrals. When referring new clients to a business, it is imperative that they also provide them with rewards. It is this incentive that has allowed the Mastercard to grow into what it is today.