question: What role do companies like Visa and MasterCard play in credit cards and why can’t banks issue their own cards?
comment: Visa and MasterCard are facilitators of financial transactions, but they don't actually loan money or extend credit themselves. But they do process all transactions. The reason why banks use visa and MasterCard is because of their massive infrastructure and processing services. Visa is an accepted payment among merchants across the globe. They process the transactions on behalf of the issuer between the purchaser and the seller, and they have high security facilities to do so. For a bank to start their own credit card, they'd have to built those own transaction facilities themselves, and then find merchants to accept them as an authorized payment method. Getting a debit card issued that can only be used at certain locations would be a huge drawback. It's also problematic because you'd need a critical mass of users in order to be an accepted payment method for different stores. Building that userbase is hard, and any bank that wants to start their own payment method would have an uphill battle of convincing other banks to issue their cards There are store credit cards that the store itself owns and operates. I believe Kohl's is one example, but their cards can only be used at their locations.
passages: The payment card industry consists of all the organizations which store, process and transmit cardholder data, most notably for debit cards and credit cards. The security standards are developed by the Payment Card Industry Security Standards Council which develops the Payment Card Industry Data Security Standards used throughout the industry. Individual card brands establish compliance requirements that are used by service providers and have their own compliance programs. Major card brands include American Express, Discover Financial Services, China UnionPay, Japan Credit Bureau, MasterCard Worldwide and Visa International. Most companies use member banks that connect and accept transactions from the card brands. Not all card brands use member banks, like American Express, these instead act as their own bank.
   Card association
  
  A card association is a network of issuing banks and acquiring banks that process payment cards of a specific brand.
  
  Section::::Examples.
  
  Familiar payment card association brands include China UnionPay, RuPay, Visa, MasterCard, American Express, Discover, Diners Club, and JCB. Visa, MasterCard and American Express issuers co-brand with their card association. for example, "Wells Fargo Visa" or "Citi MasterCard".
  
  Section::::Statistics.
  
  Card associations Visa and MasterCard each comprise over 20,000 card issuing banks.
  
  Among United States consumers alone, over 600 million payment cards are in circulation.
  
  Worldwide, Visa issuers have over 1.5 billion payment cards in circulation.
   Members of the PCI Security Standards Council currently consist of the five major payment brands: Visa, MasterCard, American Express, Discover, and JCB. The executives and management of the PCI SSC are also filled by employees of the aforementioned payment brands.
  
  Interested parties can participate in the development of the PCI security standards through registration as a Participating Organization. These participants are organized into Special Interest Groups which are tasked with recommending revisions to and the further development of the various security standards maintained by the council.
   BULLET::::- Cardholder: The holder of the card used to make a purchase; the consumer.
  
  BULLET::::- Card-issuing bank: The financial institution or other organization that issued the credit card to the cardholder. This bank bills the consumer for repayment and bears the risk that the card is used fraudulently. American Express and Discover were previously the only card-issuing banks for their respective brands, but as of 2007, this is no longer the case. Cards issued by banks to cardholders in a different country are known as offshore credit cards.
   Since the 1990s, smart cards have been the subscriber identity modules (SIMs) used in GSM mobile-phone equipment. Mobile phones are widely used across the world, so smart cards have become very common.
  
  Section::::History.:EMV.
  
  Europay MasterCard Visa (EMV)-compliant cards and equipment are widespread with the deployment led by European countries. The United States started later deploying the EMV technology in 2014, with the deployment still in progress in 2018. Typically, a country's national payment association, in coordination with MasterCard International, Visa International, American Express and Japan Credit Bureau (JCB), jointly plan and implement EMV systems.
   Since then, Citibank, Wells Fargo, First National Bank of Omaha, USAA, Synchrony Financial, and US Bancorp have started issuing American Express cards. Citi issues the Macy's and Bloomingdale's American Express cards along with Citi-branded cards. Wells Fargo issues American Express cards under their own brand and for Dillard's. US Bancorp issues American Express-branded cards for US Bank along with Elan Card Services, a subsidiary that issues credit cards on behalf of small to midsize banks. Some credit unions, including PenFed, also issue American Express cards. JPMorgan Chase is the largest bank and the only Big Four bank in the US that does not partner with American Express. Instead, JPMorgan made the decision in 2013 to partner with Visa on the ChaseNet closed-loop network that is similar in terms of functionality to the American Express network.
   Card reciprocal agreements
  
  In order to expand the acceptance of their credit and debit cards, many networks, such as Discover, JCB, UnionPay, BC Card, and RuPay create alliances with other networks.
  
  Section::::Existing reciprocal agreements.
  
  The table below is designed so that one can easily look up his/her branded card in the first column, and see what other networks it is accepted on. Information, naturally, will be repeated as a result.
   The urban development ministry brought in the National Payments Corporation of India (NPCI) with the task of management, clearing and settlement of payments, simulating cards and terminals and maintenance of network. Bharat Electronics Limited (BEL) has created the reader prototype.
  
  On 8 April 2019, "The Economic Times" reported that Visa was seeking to issue National Common Mobility Cards. Visa announced that it had launched specifications to support the NCMC on 13 May 2019. Mastercard stated on 22 May 2019 that 15 Indian banks were at "various stages of signing up" for its NCMC.
  
  Section::::Acceptance.
   Historically credit card processing services were supplied by banks that were members of the Visa or MasterCard networks. Typically banks both issued credit cards and helped merchants process them, but over time the industry consolidated. Now, very few banks issue credit cards and the industry is dominated by a few large issuers - Elavon, Citibank, Capital One, MBNA / Bank of America, and Chase. Even fewer banks process credit cards. Banks found that it was not within their skillset to convince every small merchant to accept credit cards, and they began to outsource the selling of such services to small companies called ISOs (Independent Sales Organizations). They also found that massive scale helped reduce the cost of processing credit cards, so they began to outsource processing to a few giant processors including Elavon, TSYS, First Data and MSI.
   In a four-party scheme, the issuer and acquirer are different entities, and this type of scheme is open for other institutions to join and issue their own cards. This is the type of card scheme used by brands such as Visa, Mastercard, Verve Card, UnionPay and RuPay. There are no limitations as to who may join the scheme, as long as the requirements of the scheme are met.
   On 7 September 2006, American Express, Discover Financial Services, Japan Credit Bureau, MasterCard Worldwide and Visa International formed the Payment Card Industry Security Standards Council (PCI SSC) security council with the goal of managing the ongoing evolution of the Payment Card Industry Data Security Standard. The council itself claims to be independent of the various card vendors that make up the council. As of 1 August 2014, the PCI SSC website lists 688 "Participating Organizations". Internationally, 61 different financial institutions were noted, including Bank of America, Capital One, JP Morgan Chase, Royal Bank of Scotland, TD Bank and Wells Fargo. A total of 275 merchants were listed, including Amazon.com, Burger King, Citgo, Dell, Equifax, Exxon Mobil, Global Cash Access, Motorola, Microsoft, Southwest Airlines and Walmart.
   BULLET::::- Chris McWilton: president – North American markets
  
  BULLET::::- Ann Cairns: president – international markets
  
  BULLET::::- Javier Perez: president – Europe
  
  BULLET::::- Vicky Bindra: president – Asia/Pacific
  
  BULLET::::- Betty Devita: president - Canada
  
  BULLET::::- Gilberto Caldart: president - LA/C
  
  BULLET::::- Michael Miebach: president - Middle East & Africa
  
  Prior to its IPO in 2006, Mastercard was an association that had a board of directors composed of banks. The current board of directors includes the following individuals:
  
  BULLET::::- Richard Haythornthwaite, chairman of the board Mastercard Incorporated, president, PSI UK Ltd
  
  BULLET::::- Ajay Banga, president and chief executive officer, Mastercard Worldwide
   Mastercard, originally known as "Interbank" from 1966 to 1969 and "Master Charge" from 1969 to 1979, was created by an alliance of several regional bankcard associations in response to the BankAmericard issued by Bank of America, which later became the Visa credit card issued by Visa Inc.
  
  Section::::History.
   A credit card issuing company, such as a bank or credit union, enters into agreements with merchants for them to accept their credit cards. Merchants often advertise which cards they accept by displaying acceptance marks – generally derived from logos – or this may be communicated in signage in the establishment or in company material (e.g., a restaurant's menu may indicate which credit cards are accepted). Merchants may also communicate this orally, as in "We take (brands X, Y, and Z)" or "We don't take credit cards".
   Payment Card Industry Security Standards Council
  
  The Payment Card Industry Security Standards Council was originally formed by American Express, Discover Financial Services, JCB International, MasterCard and Visa Inc. on 7 September 2006, with the goal of managing the ongoing evolution of the Payment Card Industry Data Security Standard. The council itself claims to be independent of the various card vendors that make up the council.
   Very high interchange fee for Visa (1.5–1.6% from every transaction's final price, which also includes VAT) in Poland started discussion about legality and need for government regulations of interchange fees to avoid high costs for business (which also block electronic payment market and acceptability of cards). This situation also led to the birth of new methods of payment in the year 2013, which avoid the need for go-between (middleman) companies like Visa or MasterCard, for example mobile application issued by major banks, and system by big chain of discount shops, or older public transport tickets buying systems.
   Beginning in 2004, Costco issued co-branded American Express cards which also doubled as a membership card. Costco ended this arrangement in 2016 in the United States and in 2015 in Canada. The cards did not have annual fees and offered cash back in form of in-store rebates on certain tiers of purchases. The TrueEarnings cards issued by Costco in the United States were an extension of an exclusive credit card network deal between Costco and American Express dating to 1999. Costco was the last major U.S. merchant that accepted American Express cards exclusively. In November 2011, Neiman Marcus, which gave similar general-purpose card exclusivity to American Express since 1987, began accepting Visa and Mastercard.
   In 2017, Ajay Kanwal, Former Regional Chief Executive for ASEAN and South Asia at Standard Chartered Bank has been appointed as Senior Advisor at Mastercard
  
  Section::::Corporate affairs.:Company culture.
  
  Mastercard was listed as one of the best companies to work for in 2013 by Forbes.
  
  In 2016, Mastercard UK became one of 144 companies who signed the HM Treasury's Women in Finance Charter, a pledge for balanced gender representation in the company.
  
  Section::::Mastercard Contactless.
   In 2013 Royal Bank of Scotland MasterCard customers became eligible for MasterCard’s "enhanced Central Travel Service" (eCTS), which uses VCN technology. This service is intended to provide companies currently paying for travel through multiple accounts with a centralised travel payments system.
  
  In 2015 Etisalat Egypt, National bank of Egypt NBE and MasterCard launched "Virtual Card Numbers, VCN" service via Flous service. The service works on any mobile phone. Every time a VCN is requested, a new one will be generated, and the user notified by SMS.
  
  Section::::Technologies.:Discontinued programs.
   Visa teamed with Apple in September 2014, to incorporate a new mobile wallet feature into Apple's new iPhone models, enabling users to more readily use their Visa, and other credit/debit cards.
  
  Section::::Operations.:Operating regulations.
  
  Visa has a set of rules that govern the participation of financial institutions in its payment system. Acquiring banks are responsible for ensuring that their merchants comply with the rules.
   The current micro-payment landscape in Singapore is fragmented with different standards, with two main players, NETS and EZ-Link. EZ-Link controls the transit space and NETS controls the motoring (ERP, parking) space. NETS also dominates the retail space, with EZ-Link having limited presence. Cards and readers from both providers cannot currently interoperate and consumers hold different cards for payment of different services and goods.
   That same year, First National City Bank joined Interbank and merged its proprietary Everything Card with Master Charge.
  
  In 1968, the ICA and Eurocard started a strategic alliance, which effectively allowed the ICA access to the European market, and for Eurocard to be accepted on the ICA network. The Access card system from the United Kingdom joined the ICA/Eurocard alliance in 1972.
  
  In 1979, "Master Charge: The Interbank Card" was renamed "MasterCard". In 1997, Mastercard took over the Access card; the Access brand was then retired.
   BULLET::::- Mastercard's liability shift took place on 1 October 2008.
  
  Section::::Implementation.:Latin America and the Caribbean.:Mexico.
  
  BULLET::::- Discover implemented a liability shift on 1 October 2015. For pay at the pump at gas stations, the liability shift is 1 October 2017.
  
  BULLET::::- Visa's liability shift for points of sale took place on 1 April 2011. For ATMs, the liability shift took place on 1 October 2012.
  
  Section::::Implementation.:Latin America and the Caribbean.:Venezuela.
  
  BULLET::::- Mastercard's liability shift took place on 1 July 2009.
  
  Section::::Implementation.:Middle East.
   There are two major benefits to moving to smart-card-based credit card payment systems: improved security (with associated fraud reduction), and the possibility for finer control of "offline" credit-card transaction approvals. One of the original goals of EMV was to provide for multiple applications on a card: for a credit and debit card application or an e-purse. With current processing regulations in the United States, new issue debit cards contain two applications — a card association (Visa, Mastercard etc.) application, and a common debit application. The common debit application ID is somewhat of a misnomer as each "common" debit application actually uses the resident card association application.
   Section::::Regional and national payment schemes.
  
  Section::::Regional and national payment schemes.:Interac Association.
  