Now 40, MasterCard has really grown up

PURCHASE, N.Y. -- Robert W. Selander was a Harvard University graduate student in the early 1970s when he began using his first credit card with a $200 spending limit.

Credit cards were such novelties that he had a hard time using it much beyond the area of the issuing bank.

"That was when gasoline was 30 cents a gallon," Selander recalled. "For me, $200 was a lot as a grad student. It was like, 'Boy you want to be very thoughtful about how you use this.' "

These days, Selander has a much higher credit limit. And the upward arc of his career has followed the upward trajectory of the credit-card industry. He earned nearly $3.6 million last year as president and chief executive officer of MasterCard -- the industry giant that recently marked its 40th anniversary and whose old brand name, Master Charge, was on his first card.

During MasterCard's long history, "charge it" evolved into an integral part of the American vocabulary as credit and debit cards spread to the far corners of everyday life. You now can pull out the plastic to pay at McDonald's, movie theaters, sports arenas, train stations and barbershops. Uncle Sam will even let you charge your taxes.

"I'm hard pressed to come up with a place where I don't use it other than the doorman and the guy who helps carry my bags occasionally at the hotel," Selander said. "And sooner or later, we'll figure out a way to pay them with (cards), I'm sure."

MasterCard's origins date to 1966 when Karl Hinke, executive vice president of Marine Midland Bank, called a meeting of leading bankers in Buffalo, N.Y. His idea was to start a cooperative credit-card network overseen by banks to make issuing credit cards more convenient.

Statistics tell how much MasterCard has grown since:

• More than 24 million merchants accept MasterCard-branded cards now, a 183-fold increase from the 131,000 places that took them originally.

• The banks in the MasterCard network have grown from 17 to 25,000 since 1966.

• The cards carrying MasterCard brands have soared from 6 million to 800 million.

• The brand has a presence in 210 countries.

MasterCard and other players in the industry are benefiting from the seismic shift in how consumers pay their bills. That shift is seeing more payments shift from cash and check to electronic payments, including credit and debit cards.

"The market out there is still huge," Selander said. "There is probably $80 trillion in cash and check paper-based payments still being made around the world. At this point in time, the industry has only made a small dent in that."