Thread: The History of Visa Credit Cards

Visa roots were founded in 1958. It was that year that Bank of America began the credit card program known as “BankAmericard.” Originally this concept was the idea of a bank manager as a way to more efficiently pay for smaller bills that were costing the bank vast amounts of time and money to process checks for. The BankAmericard system was intended to be used only statewide in California, but in 1965 Bank of America began licensing the system to other financial institutions. Within eleven years it was being offer across the globe.

Bank of America turned over control of the program in 1970 to the various financial institutions that were using it - creating an economic joint venture who would collectively own and operate it. The domestic operations were governed by a branch known as the National BankAmericard, or NBI. A separate branch was eventually established to handle the international licensing called IBANCO.

This international arm, IBANCO, concluded in 1976 it would be more beneficial to operate the entire BankAmericard network under a single name. This was especially important because many foreign countries were hesitant to use a card associated with Bank of America, even though their part in the operation now was very minimal. In 1977 this took place when BankAmericard, Barclaycard (UK issuer), Carte Bleue (French issuer), Chargex (Canadian issuer) and the other issuers chose “Visa” as the new universal name for the program. The company’s founder, Dee Hock, came up with the name. He stated it was a term that was understood in many languages and countries, and also stood for universal acceptance. The blue, white, and gold logo flag was retained for the Visa logo. Previously, each country used their own version of this logo.

By 2006 over 21,000 financial institutions made up the Visa program. In October of that year it announced that some of it’s operations would be combined and turned into a publicly traded company. Although this IPO did not include all parts of the company, it had a very successful initial public offering. It kicked off by the market valuing the company at over $50 billion in 2008. Visa is traded under the symbol “V” on the New York Stock Exchange (NYSE).

Visa is branded today on credit cards and debit cards. However Visa issues none of the cards and makes no loans. Rather the affiliated financial institutions are responsible for both. Visa generates its revenue from the card transaction fees as well as the fees financial institutions pay to be a part of their program.

Bank of America announced in October 2007 that is would bring back the BankAmericard name by issuing the BankAmericard rewards Visa card.