Merchant Services Industry History

History of Credit:
Let’ start in 1730 when Christopher Thornton sold furniture that could be purchased over a period of time.

Then from the 18th century to the early 20th century, tallymen were very popular. These tallymen sold clothes in exchange for small weekly payments. They kept tallies on wooden sticks of the debt and payment for each customer.


Western Union, gave out metal plates or cards to their employees instead of a paycheck.

Here is a historical overview of the credit card industry:


Diner’s Club introduced the first travel and entertainment card. It was designed to help business people from carrying too much cash when traveling. The card was used for travel and entertainment expenses.


Bank of America launched it’s gold, blue and white BankAmericard in California. It had universal merchant acceptance which attributed to it’s great success.


Many banks and financial institutions offering credit programs. This allows customers to either pay off their balance or maintain a balance and incur a financial charge.


Bank America extended their BankAmericard to customers outside of California.


Interbank Card Association started a global network by establishing an association with Mexico’s Banco Nacional.


The majority of regional banks converted their independent programs to BankAmericard or Master Charge.


BankAmericard transferred ownership of the BankAmericard program to banks that issued the credit cards, creating National BankAmericard Inc.

Automation pushes were need during this time.

The 1st Stage:

The authorization process was renovated. The authorization process assures that enough credit is available on your card. Before, this was done by a specific floor limit and a phone call.

The 2nd Stage:

NBI introduced Base II for online clearing and settlement.


International Bankcard Company was formed to handle the BankAmericard program globally.


National BankAmericard establishes the first national deposit access card. This means that cardholders can debit charges from their accounts instead of having charges posted lines of credit.


BankAmericard changed it’s name to Visa®. It’s a simple clean name, and it’s pronounced the same way in almost every language. In addition, NBI was renamed Visa U.S.A. and IBANCO was renamed Visa International®.


Visa established the first electronic terminal with point of sale.


Mastercard introduced the gold bankcard program.


Mastercard uses the laser hologram for antifraud protection.


Popularity results in credit card fraud and counterfeiting.


Visa’s sales volume doubled


Visa offers multiple currency clearing and settlement.


MasterCard becomes the first payment card issued to the People’s Republic of China.


Mastercard established the first bankcard with a tamper-resistance signature panel.


Maestro finished the first coast-to-coast national online debit transaction in the USA.


Visa applied state-of-the-art neural network technologies for payments, thereby reducing card fraud.


Visa developed chip card specifications. Europay, Mastercard and Visa ensure that all chip cards operate with chip-reading terminals.


SET 1.0 (Secure Electronic Transaction) purchases use a smart card.


Mastercard/Cirrus® ATM network grows to Antarctica.


Mondex™ e-cash and MULTOS are the first products to receive the highest assurance level for ITSEC (Information Technology Security Evaluation Criteria) rating.


Mastercard releases mc² card, the only non-rectangular card.



  • occupies over 21,000 financial member institutions globally. It also accepted at over 28 million locations in 144 countries.
  • VisaNet processes over 3700 transactions a second.
  • Visa occupied 50.8% market share on 12/31/01


  • Mastercard’s total dollar volume in 2002 was 1.14 trillion.
  • Mastercard has more than 25,000 financial institutions.
  • By the end of 2002, Mastercard had issued over 127 million smart cards.



Airlines, railroads and buses began accepting card payments.


Macy’s becomes the first department store to accept credit card payments.

American Express Today:

  • 45% of American families that earn $50,00+ have an American Express card.
  • American Express clients are known to spend more



1949: First Supper

Frank McNamar and Ralph Schneider scheduled a business meal at a New York restaurant. Prior to the dinner, Frank changed into another suit. When the waiter presented the bill, Frank remembered he had forgotten his wallet in the other suit. Frank realized that people should not be limited to the amount of cash they carry on them.

In February 1950, McNamar and Schneider return to the same restaurant. When the bill arrives, McNamara gives the waiter a small, cardboard card, a Diners Club Card, and signs for the purchase. This is known as the First Supper.


Western Airlines accepted the Diners card. 10 years later every big airline company accepts the card.


Diners Club expands extremely quickly


Diners Club created the Club Rewards, the first relationship marketing program


Diners Club earned third successive Freddie award.

Diners Club Today

  • Diners Club serves 201+ countries
  • Diners Club members charge 31 billion dollars in goods/services

Discover Card

Discover was established by Sears, however Discover is now a business owned by Morgan Stanley & Co. and operates under the Discover Card® brand.

Discover Card Today

  • At the end of the fiscal year ending November 30, 2001, Discover had a net income of $726 Million.
  • Transaction volume hit $93.3 billion in 2001
  • Discover adds 4.8 million new accounts, bringing the total to $45.7 million customers.

JCB International Credit Card


Japan Credit Bureau (JCB®) is established


JCB enters the US merchant business


JCB International established in Los Angeles, USA


JCB created an alliance with Bank of America


JCB launched their US frequent flyer program “Northwest WorldPerks JCB Card”

JCB Today

  • JCB’s worldwide cardholder base is $45 million
  • JCB is accepted in 10+ million locations


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