What did the Interbank Network for Electronic Transfer (INET) stand for?
The Interbank Network for Electronic Transfer (INET) handled credit and debit card transfers between banks. In the past, before Banknet came along, it was used to move money from MasterCard Inc. (M.A.) cards.
How the Interbank Network for Electronic Transfer (INET) Works
Moving money between banks was handled by the Interbank Network for Electronic Transfer (INET), and card authorizations were handled by MasterCard’s Interbank National Authorization System (INAS).
The Interbank National Authorization System (INAS) was the first part of MasterCard’s world telecommunications network. It replaced older phone authorization technology with electronic authorization. Later, the Interbank Network for Electronic Transfer (INET) replaced the old method, where banks sent each other paper checks with electronic settlement services.
Ultimately, the Interbank Network for Electronic Transfer (INET) and the Interbank National Authorization System (INAS) were merged into Banknet. This global communications network connects all MasterCard card issuers, acquirers, and data processing centers into a single financial network.
Payments can be made anywhere in the world through Banknet. It has been around since 1997 and has over a thousand data centers worldwide. These centers can handle millions of safe transactions every hour.
If you used MasterCard before Banknet, it took about 650 milliseconds to make your payment. That time is now only 210 milliseconds, thanks to Banknet.
Banknet is built on a peer-to-peer protocol that sends transactions to different locations. There is technology in data centers that offers redundancy and sets up backup services automatically in case the primary system goes down.
Because of how Banknet is built, traffic can be controlled based on demand. This feature is essential to keep the system running smoothly during busy times, like the holiday shopping season. Banknet mainly works with AT&T Inc. on this and other technologies.
Banknet also has a service that looks into transactions for chargeback claims. This means that cardholders can get chargebacks accepted very quickly.
There is a vast data warehouse and hub in the United States called Banknet. Analysts and issuers can use it to look into payments and retail activities.
Visa vs. Master Card
An essential part of the credit and debit card system is run by MasterCard, Inc. (M.A.). “There will be 249 million Mastercard credit cards in the U.S. and 725 million cards in the rest of the world at the end of March 2021,” says creditcard.com.
MasterCard has a significant edge over its competitor, Visa Inc. (V), thanks to its Banknet technology. Visa does business through a controlled system, a “star-based” system, instead of a peer-to-peer network. Many endpoints on this type of network are linked to just a few big data centers.
That is, if one of MasterCard’s data centers goes down, there should still be a lot of others online. On the other hand, if one of Visa’s data centers goes down, more transactions are likely to be impacted.
Still, MasterCard is catching up with Visa regarding world market share. As per Creditcard.com, “Visa is the largest of the four major U.S. credit card networks.” At the end of September 2020, 343 million Visa credit cards were in use in the U.S., and 798 million Visa credit cards were used outside of the U.S.
Conclusion
- The Interbank Network for Electronic Transfer (INET) handled MasterCard’s debit and credit card transactions.
- INET sent the money, and MasterCard’s Interbank National Authorization System (INAS) handled card authorizations.
- Later, the two systems were joined to form Banknet, a single organization connecting all MasterCard data centers and issuing members into a single banking network.
