Mastercard, every mention
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Verbatim, from the transcripts: the passages where Mastercard comes up
Microsoft Volume I: The Complete History and Strategy of founding through Windows 95 (Audio) · Acquired
- ▶ 40:47 David Rosenthal Other companies in the partner network include Oracle, American Express, MasterCard, Accenture, and many more, including, friends of the show, Modern Treasury.
- ▶ 3:46:55 Ben Gilbert Quickly take over the world at MasterCard by being an open network where they didn't have to do all the work to scale themselves.
- ▶ 3:47:01 Ben Gilbert They could distribute to a bank, partner with a bank, and then boom, each of the banks that was on their network could independently scale at their own rate, which created obviously compounding effects for how fast Visa and MasterCard…
Visa (Audio) · Acquired
- ▶ 0:57 Ben Gilbert And Visa, along with just one other competitor, MasterCard, has tirelessly spent decades stitching together all the banks, merchants, and the relationships with consumers to make this possible.
- ▶ 45:58 David Rosenthal So B of A has no distinction between what ultimately now in the Visa network and MasterCard and others is called issuing banks.
- ▶ 49:34 David Rosenthal Those pretty quickly all merge into a national association called Interbank, which, spoiler alert, Interbank is MasterCard.
- ▶ 50:19 David Rosenthal I don't know that this is gonna work, even though it actually might work, because it's part of the MasterCard Interbank network.
- ▶ 1:21:50 David Rosenthal You don't go join Interbank MasterCard, and you also don't go start your own networks or peel off parts of the network.
- ▶ 1:33:42 David Rosenthal So, we talked about the need for the universality of a mark, and why early Interbank, that was a problem until they standardized on MasterCard.
- ▶ 1:37:32 Ben Gilbert They hadn't yet turned it to MasterCard.
- ▶ 1:37:51 Ben Gilbert So this, despite all the deck chair rearranging between the member banks, it was great for Visa to leap ahead of MasterCard.
- ▶ 1:38:08 David Rosenthal So as you say, they blow way past MasterCard thanks to this.
- ▶ 1:40:14 Ben Gilbert Anytime that you have something that's more distributed, you're going to be compromising a little bit on the user experience because you can't sort of rule by fiat when you want to make a change, but it does potentially come with much…
- ▶ 1:40:34 David Rosenthal It's also worth closing the loop on MasterCard here too.
- ▶ 1:40:37 David Rosenthal I mentioned that the DOJ eventually came after both Visa and MasterCard and
- ▶ 1:40:45 David Rosenthal That does happen in 1975, and so this concept of duality takes hold for the bank's duality, meaning they can multi-home on both Visa and MasterCard.
- ▶ 1:41:01 David Rosenthal He doesn't want his banks to be able to join MasterCard too, but he also makes the surprisingly correct argument.
- ▶ 1:41:23 David Rosenthal Because now there's no more competitive vector between Visa and MasterCard.
- ▶ 1:41:40 David Rosenthal Irony of ironies, later in 1988, the DOJ again sues Visa and MasterCard for being a duopoly and not competitive enough.
- ▶ 1:41:54 Ben Gilbert There have been many attempts that we'll talk about toward the end of this episode of displacing Visa and MasterCard or inventing new payment systems, and like, they never work, or they haven't worked yet.
- ▶ 1:42:42 Ben Gilbert But interestingly, Visa and MasterCard cried foul when, ah, you know, all of their banks were multi-homing, and Amex, with their virtue of a slightly different business model, was allowed to go and try to lock up merchants to be exclusive…
- ▶ 1:48:06 David Rosenthal But it wasn't like it is today, where obviously you're gonna use your credit card, which is probably a Visa and maybe a MasterCard, to pay for everything that you do everywhere instantly.
- ▶ 1:55:28 David Rosenthal Interbank and MasterCard on joining the system, but there's all these problems with it, and they don't know how to build technology, and the whole thing dies on the vine.
- ▶ 1:55:40 David Rosenthal The other thing that happens is Interbank and MasterCard actually get involved in the project.
- ▶ 2:19:52 David Rosenthal To the extent we competed with anybody, we competed with MasterCard, so we positioned against them.
- ▶ 2:20:01 David Rosenthal The path to victory here is not positioning against MasterCard.
- ▶ 2:21:23 David Rosenthal The strategy is use American Express to eliminate the stigma around Visa, and by association, paint MasterCard as having that stigma, because we're not even bothering to talk about them.
- ▶ 2:25:21 David Rosenthal In 2005, there finally was another huge antitrust lawsuit, I think against both Visa and MasterCard.
- ▶ 2:26:14 Ben Gilbert And MasterCard had gone public and did not sort through this issue at all.
- ▶ 2:26:38 Ben Gilbert They had to be competitive with MasterCard who was going public.
- ▶ 2:27:00 Ben Gilbert So while MasterCard had a pretty flubbed IPO, Visa had a great IPO because they said,
- ▶ 2:30:19 Ben Gilbert There are assessment fees, or network fees, and that network fee goes to Visa, MasterCard, etc.
- ▶ 2:47:50 Ben Gilbert In my head, Visa has been this steady state thing in the world, as has MasterCard, but the last decade has been the story of Visa's incredible dominance in revenue and transactions and volume.
- ▶ 2:49:36 Ben Gilbert I don't know of any other businesses of this size or even, like, five or 10 times smaller that have over a 50% net income margin, including MasterCard, which is 43%.
- ▶ 3:01:57 Ben Gilbert This is a lot like the Lockheed Martin episode where I'm actually not sure we can apply the formal definition where we say, like, what enables them to be more profitable than MasterCard, because together they're like this…
- ▶ 3:02:26 Ben Gilbert And I think that's the right thing to do here with Visa and MasterCard, too.
- ▶ 3:02:29 Ben Gilbert At the end of the day, Visa and MasterCard have basically no sustainable competitive advantage over each other.
- ▶ 3:03:04 Ben Gilbert It's funny, even though it's a commodity, like them and MasterCard are a commodity, they somehow position themselves as more premium.
- ▶ 3:03:14 Ben Gilbert But you're literally never making, I guess it's for the banks, because consumers are never making a buying decision on whether it's Visa or MasterCard.
- ▶ 3:03:27 David Rosenthal So yes, the banks make the decision, but really the consumers make the decision, because if consumers have a preference for Visa over MasterCard, they'll demand it from the banks.
- ▶ 3:03:58 David Rosenthal I think today that's true, but I do think, based on the research, and I was maybe too biased towards Visa, but I think Visa did accelerate past MasterCard, and I think there was a strong brand element of that.
- ▶ 3:04:14 Ben Gilbert It's funny how it used to feel more like you were getting a Visa card that was somehow, like, powered by a bank, and now it feels more like you are getting a custom proprietary product that a bank invented for you that happens to either…
- ▶ 3:04:35 Ben Gilbert You're like, sorry, there's a bank behind this, and like, oh, is it Visa or MasterCard?
- ▶ 3:05:29 Ben Gilbert Ok, so Visa and MasterCard together, which of the seven powers do they have today?
- ▶ 3:05:45 Ben Gilbert Any investment that Visa or MasterCard make get amortized across 16,000 member banks, across four billion cards, across
- ▶ 3:09:01 Ben Gilbert They just go and talk to Visa and MasterCard and say, who gives me a better deal?
- ▶ 3:09:14 Ben Gilbert Well, yeah, I mean, before then, there's interesting analysis to do between Visa and MasterCard.
- ▶ 3:09:24 Ben Gilbert But yeah, is there switching costs between the Visa, MasterCard oligopoly and someone else?
- ▶ 3:09:33 Ben Gilbert Like, if you were a bank that wanted to issue a bunch of cards that weren't Visa or MasterCard.
- ▶ 3:18:34 David Rosenthal Well, before we go into Bear and Bull, where I know you and we have a lot to talk about, what could potentially disrupt Visa and MasterCard, I think it is worth just one minute on the value creation side of this, and I really think you hit…
- ▶ 3:18:58 David Rosenthal There's a lot of value capture that Visa is doing and MasterCard too.
- ▶ 3:26:29 Ben Gilbert As it happens right now, you need to have a card issued by a bank that likely is issued on Visa or MasterCard or Amex or Discover, and then it goes over those payment rails.
- ▶ 3:35:30 David Rosenthal But, as you say, all those transactions are still just tokenized Visa MasterCard cards.
- ▶ 3:38:11 Ben Gilbert And the beautiful irony that will tie a bow on this whole episode is the Bank AmeriCard credit card by Bank of America runs on MasterCard's network.
- ▶ 3:38:33 Ben Gilbert And run your transactions over MasterCard's beautiful, stellar network.
The Browser (with Brendan Eich, Chief Architect of Netscape + Mozilla and CEO of Brave) · Acquired
- ▶ 1:21:20 Brendan Eich They can give you a MasterCard number from a block that they allocate from that isn't your number.