what’s the difference from Mastercard and Maestro, why these two circuit exits and why Mastercard cards have 16 digits while Maestro have 15? (And respectively Visa from VisaElectron which are the the same but from another company)
In: Economics
I’ve already read this question but it explains why a third party intermediary (like Visa or Mastercard) exist in the first place. https://www.reddit.com/r/explainlikeimfive/comments/4nprmr/eli5_what_role_does_visamastercard_maestro_etc/
I’m more interested in why both companies developed a second brand (Maestro and Visa Electron respectively) and why cards (either debit or credit) have different digits of they are Mastercard vs Maestro.
Furthermore [This](http://www.differencebetween.net/business/finance-business-2/difference-between-maestro-and-mastercard/) explanation which says “Mastercard is for credit cards and Maestro for debit cards” doesn’t hold true as I have different Mastercard cards which are debit cards.
Maestro was created as a joint partnership between Mastercard and Eurocard about 30 years ago. Eventually Mastercard bought Eurocard and merged the two organizations. Mastercard Debit is more common now. But some people were already used to using Maestro and liked the brand name. So they kept it around.
Maestro has 13 to 19 digits (not just 15). There is no standard for digits. Different credit card companies use different digits.
Visa had Visa Debit. You would go to the store, they could make a carbon copy of your card, and charge you later. The machines they used were called zip zap machines. This worked fine for credit cards because the whole point was to loan you money and bill you at the end of the month. But with debit cards, it’s bad to have a delay between the time you buy something and when the money leaves your account.
So Visa bought a company called Interlink. This company allowed for electronic verification. You scanned your credit card, it sent the signal to your bank right away, and then approved the transaction. Because this was a fancy new electronic product (it was 30 years ago), they named it Visa Electron. Nowadays credit card companies use even fancier technology like chip and pin. Generally speaking, people now prefer to use the Visa Debit brand name instead of Visa Electron. But again, some people in some countries like the old brand name and stick with it.
I’m not sure about the details exactly, but I also think there was some anti-trust lawsuits involved as well. Visa and Mastercard get sued for monopolistic practices more than pretty much any other set of companies.
It might be hard because we blur the concepts in the United States with how we issue debit cards. But abroad, a credit card is a credit card, a debit card is a debit card, and neither the two shall meet.
Debit networks, like Maestro, require a PIN, and settle the transaction immediately.
Credit networks, like MasterCard, do not necessarily require a PIN (though it’s usually required outside the US), and settle the transaction a couple of days later.
In the US, we programmed our debit cards to run over whatever network was available for convenience. This is why you’re usually asked, “Debit or credit?” at checkout.
As for the brand names, MasterCard and Visa (and Discover and AmEx) are companies, networks and brands–all at the same time. They put out lot of products, too, some of which succeed and some that don’t, but either way the products also have their own branding. These companies expand by acquiring or partnering with other companies, and by buying up financial products developed by others. Depending on the relative value of the acuired vs acquirer brands, one might be retained, changed or a mix of both based on local market values.
As for the associated range length, the ISO distributes banking numbers in, I think, 6-digit ranges. Companies may add anywhere from 6 to 12 additional numbers to gain more use out of their ranges. Short account numbers are more convenient, but the issuer won’t get as much use out of the core range. So a small company with a surplus of ranges may issue products with shorter ranges, while a big bank might want a longer range. Further, when a big bank acquires a smaller bank or product, it probably will not want to reissue and recode the supporting systems (and risk loss of acceptance, create failures, etc.) So inconsistencies in range length are pretty common.
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