My Merchant Account Blog

Visa and MasterCard Defined

Monday, May 15, 2006

You probably accept Visa and MasterCard in your business or over the internet. And you get charged to accept these cards. Not once, but every time. You probably get charged a discount rate ranging from usually 1.4% to around 3.5%, depending on your type of business and the type of transaction (keyed (internet / telephone) or swiped (on a POS terminal)).

But Visa and MasterCard are not banks - they are registered and trademarked brands issued by card-issuing banks. Advertising plays a very big role in promoting the brands so in turn, they promote the use of the cards. Chances are very good that you are familiar with Visa's "Don't leave home without it," and MasterCard's "Priceless".

Visa and MasterCard associations are actually designed to generate revenue for their member banks. They do this by charging discount rates and transaction fees to the merchant.

To accept credit cards, you need to have a sponsoring bank. And for this piece, you can stay tuned for more information.

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