The History of Visa
The history of bank cards dates back to 1914. That year, Western Union issued the first consumer credit card. These early cards were issued to preferred company customers to offer them an array of special services, including interest-free deferred payments.
In the first decades of the 20th century, a large number of non-financial companies, including hotels, department stores and gas companies, issued credit cards to their customers. The Diners Club card, introduced in 1950, was the first credit card accepted by different merchants.
In 1951, Franklin National Bank of Long Island, New York, issued a card that was accepted by local merchants, and soon approximately 100 other banks began to issue cards. Cardholders were not charged fees or interest; they simply paid the full amount due on the account upon receipt of the statement, but banks did charge merchants a fee for card transactions.
Bank of America had the entire state of California as a potential market, and when it issued BankAmericard in 1958, the card was an instant success. By 1965, the institution had already subscribed licensing agreements with a group of banks outside California, allowing them to issue BankAmericard. At the same time, another group of banks in Illinois joined forces in the U.S. East Coast to create Master Charge. By 1970, over 1,400 banks were offering BankAmericard or Master Charge cards, and bank cards were already generating US$3.8 billion in sales volume.
In 1970, Bank of America gave up control of the BankAmericard program. BankAmericard Issuer banks took control of the program, creating National BankAmericard Inc. (NBI), an independent non-stock corporation, which would be in charge of managing, promoting and developing the BankAmericard system within the U.S.
Outside the U.S., Bank of America continued to issue licenses to banks to issue BankAmericard. By 1972, licenses had been granted in 15 countries. In 1974, IBANCO, a multinational member corporation, was founded in order to manage the international BankAmericard program.
In many countries, there was still reluctance to issue a card associated with Bank of America, even though the association was entirely nominal in nature. For this reason, in 1977 BankAmericard became the Visa card, retaining its distinctive blue, white and gold flag. NBI became Visa U.S.A., and IBANCO became Visa International.
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