Mastercard was founded in 1966 as the Interbank Card Association, later becoming Mastercard.
The association began when several U.S. banks created a competing card network to Bank of America’s BankAmericard system. It initially operated under the Master Charge name before adopting Mastercard in 1979.
Mastercard is a payment network rather than a bank that normally lends directly to cardholders. Individual banks and other financial institutions issue Mastercard-branded credit and debit cards, while Mastercard provides the network that routes and authorizes transactions.
A common mix-up is confusing Mastercard with its member banks. The logo identifies the network, but the card’s interest rate, fees, rewards, and credit decision come from the issuing institution. Mastercard later expanded internationally and became one of the world’s major card networks.