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What do those credit card companies do? A group of New York banks joined to form the Interbank Association in 1966 and began issuing credit cards. This association was originally dominated by Citibank. Within a few years, the group changed its name to "MasterCard International," hired MASH TV nurse Loretta Switt as its pitchwoman, and has been one of the major players on the consumer finance scene ever since. Like its chief competitor Visa, MasterCard is not the issuer of the cards. Banks issue the cards, as well as take on the risk of bad credit, and set interest rates. Visa and MasterCard process transactions and perform other administrative functions, and market their brands. Executives of the largest issuing banks generally sit on the boards of the credit card organizations. The banks pay the credit card companies to use their brands. The second son Today, MasterCard is the second-leading credit card (behind arch rival Visa) in the world. By the end of the 1990s, the company had about half the number of cards in circulation as Visa. However, its cards are accepted at more locations worldwide. The company accounts for 25.2 percent of credit card sales (compared to just under 50 percent for Visa). The Citicoup, and commercial banks vs. credit cards MasterCard's membership is set to jump, however, because of a partnership it recently formed with banking giant Citigroup. The No. 2 credit card issuer in the U.S. (behind Bank One), Citigroup had fought with Visa over fees and the placement of the Citi-brand on its cards. Citigroup CEO John Reed resigned from Visa's board of directors in February 1999, and suggested that other major banks would follow suit. Because of global consolidation of commercial banks, giants like Citigroup believe that the global recognition of the MasterCard and Visa brand names is becoming less important, and that they will eventually be able to issue credit cards on the strength of their own brands. If it seems to you that this strategy threatens the very existence of credit card companies, you're right. At the same time, however, commercial banks are feeling pinched by the move of credit card companies into debit cards. Debit cards, which automatically deduct money from bank accounts, could replace cash and checks, which are the core products of commercial banks. If credit card companies succeed in branding debit cards as successfully as they have credit cards, an important connection between consumers and their banks could be lost. Antitrust allegations While Visa and MasterCard are competitors, they often work in something of an alliance. Their member banks overlap a great deal, and banks that issue Visa and MasterCard have been restricted from issuing American Express and Discover cards. The antitrust implications of the situation haven't been lost on government regulators. In Europe and Latin America, Visa and MasterCard have been ordered to end such exclusionary agreements, and in October 1998 the U.S. Justice Department sued the Visa and MasterCard on antitrust grounds.
MasterCard has a "slow hiring process." Because the company is relatively small (with only a few thousand employees worldwide), MasterCard looks for candidates who already have some financial services experience, or at least some experience in new technology. MasterCard also prefers candidate who can excel in a "team setting" and who are "not too confrontational or aggressive." The company's web site - www.mastercard.com - allows job seekers to search for open positions by location (the technology and operations positions are in St. Louis; the finance, marketing, and strategic planning positions are in Purchase, NY). Job seekers can apply online through MasterCard's web site. The company reportedly does "very little campus recruiting."
The credit business stops for no one MasterCard employees enjoy working for an "easily recognizable name" in "fairly relaxed environment." They say that middle management makes a "concerted effort to orient new employees." Information systems employees like the fact that "technology speaking, we are on the cutting edge." However, insiders warn that those considering the company be prepared to work hard. "It is a fast-moving, stressful culture," reports one insider. Says a contact at the company's headquarters: "Official work hours are 35 hours, with flex-time in the summer, and no telecommuting. The reality is 50 to 60 hours for the ambitious, but telecommuting is common." Employees in networking and information systems comment that they often work "irregular hours" because "the credit business never shuts down for a holiday." However, another insider reports that "all in all, work hours are not tremendous unless you make them to be." Phenomenal 401(k) Year-end bonuses and a "phenomenal" 401(k) plan at MasterCard earn high marks as well. Reports one insider: "While other companies are matching at an industry standard of $0.50 for each dollar invested, MasterCard matches at an unbelievable $2.17 for each dollar." This matching applies to up to 6 percent of an employee's salary. Says another contact about the 401(k) match: "You won't find that anywhere." "Small perks" such as the company gym and the subsidized cafeteria at the firm's New York headquarters make MasterCard a "highly desirable" employer. One insider describes the headquarters as a building with a high 'wow factor' - a place you're proud to show off. The environment around the building is campus-like with "ducks, geese, and trees." Also, the firm reportedly has "excellent dental and health care benefits." Casual dress, good diversity At MasterCard, "dress is business casual, basically no jeans or sneakers or T-shirts." Says another insider: "there's no suits, except for outside meetings." Insiders give MasterCard high marks when it comes to diversity. Says one contact: "We have in place formal diversity and sensitivity training, so I think it's OK." Says another: "MasterCard is very dedicated to ensuring all employees receive training to ensure discrimination doesn't happen here. MasterCard is an international company and considers cultural diversity very important."
Human Resources
Cirrus;Maestro;Mastercard
American Express; Morgan Stanley Dean Witter; Visa More Company Profiles For more career information, go to Vault.com ©2000, Vault.com Inc
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