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Bank Card Association

Written By
Paul Tracy
Updated January 16, 2021

What is the Bank Card Association?

A bank card association is a company owned by one or more financial institutions that licenses credit card programs.

How Does the Bank Card Association Work?

The two most popular bank card associations are Visa and MasterCard. They license their names to banks that want to launch, say, the "McDonald's Visa Card" or the "Donald Trump Fan Club MasterCard." The banks get the right to use the Visa or MasterCard logo on the card, and the bank card association authorizes the cardholders' transactions, settles transactions between people with different cards, and collects the interchange and processing fees.

Why Does the Bank Card Association Matter?

The bank card association is a credit card company that essentially handles all the back-office work involved with processing transactions, fees, fund settlements and other tasks. Visa and MasterCard aren't the only associations.

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