Credit Cards: Brands
Credit cards are issued by a credit provider (this is often a bank, but can sometimes be a captive bank created to issue a particular brand of credit card, such as American Express Centurion Bank). When thinking about credit card brands most people think in terms of the issuing bank or provider such as Chase Manhattan, CitiBank, American Express, Braclays etc; that is the issuer name usually embossed on the top left hand corner of the card. However, these issuers are, in general, merely agents for the large-scale conglomerates that issue and clear credit card purchases (the best known being Visa and MasterCard). Below you will see a guide to the major credit card types (brands) and who actually is behind them.
AmericanExpress
As a company American Express was founded in 1850 as an express business by Henry Wells, William Fargo, and John Butterfield. In 1882 American Express launched its own money order busienss to compete directly with the US Post Office's money order service. This was a product that quickly spread to Europe where no equivalent service existed. On a trip to Europe JC Fargo found that it was virtually impossible to gain access to money anywhere save in major cities, even with letters of credit from US banks. As a result the American Express travellers' cheque was invented and launched in 1891. The Travelers Cheque established American Express as a truly international company and in 1915 they announced the establishment of a Travel Department and soon established its first travel agencies.
As early as 1946 American Express executives discussed the possibility of launching a travel charge card; however it wasn't until Diners' Club issued their card in 1950 that American Express began to seriously consider the proposition. It wasn't until 1959, however, that American Express began to issue the standard embossed plastic credit card (becoming the first company to do so). As of this writing American Express is a diversified financial services compnany, headquartered in New York City who now issue various ranges of credit cards as well as their familiar charge cards and credit cards.
Bankcard
Bankcard was founded in 1974 as a shared-brand credit card issued by a conglomerate of Australian financial institutions. The card only became accepted by financial instituions in Australia and New Zealand. As a result of its limited geographic range the Bankcard Association of Australia announced in February 2006 that all of its cards would be phased out and as of this writing the National Australia Bank is the only bank still issuing Bankcards; though all National Bankcard accounts will be transferred or closed by 19 May, 2006.
Diners Club International
Originally formed as Diners Club in 1950 it was the first independent credit card company in the world. The original merchants signed by Diners Club was a group of local restaurants (over 1000 by the end of 1940) and it is from this that the card gains its name. Today, Diners Club International is a part of Citibank, a unit of Citigroup, and has expanded its coverage to include all types of merchants instead of being limited to restaurants. The Diners Club U.S. cards are now a part of the MasterCard network, meaning cardholders can use their cards at over 24 million locations worldwide.
Discover
The Discover Card is a brand of credit card operated by Discover Bank and issued on the Discover Network. All divisions operate under Discover Financial Services, LLC; a subsidiary of Morgan Stanley headquartered in Riverwoods, Illinois. The card was originally introduced by Sears in 1985 (which, at the time, was the largest retailer in the US). The Discover card represents one of the few attempts at creating a credit card to rival MasterCard and VISA that actually gained a large national user base in the US. Largely this was because the card carried no annual fee (uncommon at the time) and typically offered a higher credit limit than many other cards. Customers of this card also gained a 'Cashback Bonus' on each purchase. However, Sears put a considerable amount of money into promoting the card and stopped taking rival cards. This and competitors' lack of acceptance for the card placed Sears in financial difficulty and in 1993 they sold their financial services division to Dean Witter financial services which subsequently became part or Morgan Stanley in 1997.
JCB
JCB is a credit card issued by the Japan Credit Bureau (株式会社ジェーシービー), a credit card company based in Tokyo, Japan. JCB was founded in 1961 and acieved dominance of the Japanese credit card market in 1968 when it purchased Osaka Credit Bureau. From its beginnings as a solely Japanese card, JCB cards are now accepted by 11 million merchants in 189 countries, and are commonly accepted at hotels and upscale shopping outlets in major cities around the world.
Visa
The Visa credit card is operated by the Visa International Service Association of San Francisco, California, USA, and represents an economic joint venture of 21,000 financial institutions that issue and market Visa products. The origin of the card lies in the BankAmericard credit card issued by the Bank of America and 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. Legally, no entity is called Visa. Rather, Visa comprises four non-stock, separately incorporated companies that employ 6000 people worldwide: Visa International Service Association, Visa U.S.A., Inc. , Visa Canada Association and Visa Europe Ltd. The separately incorporated regions are group members of Visa 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.
The de-centralised 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. Through its issuing members Visa currently offers debit (pay now) cards, credit (pay later) cards and prepaid cards.
MasterCard
MasterCard Incorporated is a membership organization owned by the 25,000 financial institutions that issue its card. It was originally created by United California Bank, Wells Fargo, Crocker Bank, and the Bank of California as a competitor to the BankAmericard issued by Bank of America which is now the Visa credit card issued by Visa International. The name derives from 1967 when United California Bank, Wells Fargo, Crocker Bank, and the Bank of California licensed the name Master Charge from the First National Bank of Louisville, Kentucky. 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 the card was renamed 'MasterCard'.