Yes Mastercard was in response to the success of the BankAmericard. Banks were much more regional in the 1950s-1960s because of a federal law that prevented them from operating outside of their home state.
Bank of America was the largest bank in the largest state (California), and had the most successful credit card program (the BankAmericard). When they began franchising the program to other banks, it made sense to concentrate their efforts in states near California.
Mastercard (at the time known as Mastercharge) was formed in response by a bunch of East Coast banks.
Re: Amex... they were big in the traveler's cheques business around the time that Diner's Club launched. Diner's Club proved the model, and Amex leveraged their extensive traveler's cheque network and wealthy user base to enter the market.
Re:A History of Visa
by simonebrunozzi on Friday July 26, 2019 @03:18PM
(#20537567)
Fun fact related to BofA: It was founded by an Italian immigrant in 1904 in San Francisco, and it was called "Bank of Italy". [0]
[0]: https://en.wikipedia.org/wiki/Bank_of_America#Bank_of_Italy
And Discover leveraged Sears.
Re:A History of Visa
by activatedgeek on Friday July 26, 2019 @06:45PM
(#20539013)
Interesting!
Quite naturally, I started looking at how other major providers - Mastercard, Amex and Discover caught up to this interbank transaction labyrinth. Here's what I think after a quick look.
- Mastercard seems to have been a direct response to the growing popularity and profits of BankAmericard. [1] It started about the same time (mid 1960-s) which probably explains its growth and ability to bring enough banks in its fold.
- American Express was founded back in 1850 [2]. If I go by the original article, it appears Amex was not on the credit scene (certainly not the pioneer?) during the Americard boom. Do we know how it compensated and captured almost a quarter of the market in the US [2]? Second-mover advantage?
- Discover is the "third largest credit card brand in the United States, when measured by cards in force, with nearly 50 million cardholders" [3]. Two key acquisitions may be explain this - Pulse (an interbank electronic funds transfer network) and Diners Club (the original daddy from the article). There is no citation the Pulse acquisition but I'd assume it is an old network. The Diners Club network probably was a healthy addition to their customer base outside the US.
[1] https://en.wikipedia.org/wiki/Mastercard [2] https://en.wikipedia.org/wiki/American_Express [3] https://en.wikipedia.org/wiki/Discover_Financial