A bankcard association is a group of many institutions that offer a bankcard program. Like any business, the bankcard association sponsors the cardholder program, promotes it and funds its development. Throughout the life of the program each institution will display information about services that the cardholder program offers. Employees in customer service are trained to instruct customers about the product and how people can sign up to use it. What makes a bankcard association different from a typical sponsorship is that it also handles the processing through the same administration center. The group of institutions, whether banking or credit card processing related, provide the finances to process cards used by merchant account holders. This diversification of responsibility has several advantages.
- The financial burden is shared between all institutions involved.
- Institutions from varying corporate backgrounds come together to work as a team promoting the same product and vision.
- Strengths in one bankcard associate can make up for any weaknesses in another. For example, a major financial institution with locations all over the world may have a stronger influence when marketing the particular cardholder program to its customers. A bank with a large credit card processing department will be able to offer better technical support for development and trouble shooting.
A Brief History of Bankcard Associations
Bankcard associations come in all shapes and sizes. Some may be regional, like the New England Bankcard Association founded in 1969. Others may be national like the American Bankcard Association, offering third-party support to VisaNet with services offered like: credit card processing, point of sale (POS) systems, merchant account cash advances and online transaction processing. Bankcard associations first began in 1966, a few years after the inception of the credit card. Financial institutions pooled their resources and established what was known as the InterBank Card Association. Visa and MasterCard are prime examples of what cards came out of that first group effort. Still in effect today, Visa and MasterCard’s board members and high level executives from their member banking organizations call the shots for merchant account processing.