You can read the history section of MasterCard and Visa on Wikipedia. MasterCard started as an aliance of several American banks, Visa as a Bank of America prod

You can read the history section of MasterCard and Visa on Wikipedia. MasterCard started as an aliance of several American banks, Visa as a Bank of America product licenced to other banks. Both solve the problem of merchants having to only deal with a handful of credit card types rather than with thousands of bank-specific cards that their customers might be using (the US alone has thousands of banks). They've been exploiting 2-sided market network effects even before the internet existed: merchants feel pressured to accept them because that what all their customers use; customers use them because that's what all the merchants accept.