Interbank National Authorization System (INAS)

What Is the Interbank National Authorization System (INAS)?

The term Interbank National Authorization System (INAS) refers to a bank network that is affiliated with Mastercard International. The network was introduced in 1973 by Master Charge the predecessor of MasterCard. The system allows authorizations to take place on the global exchange between different financial institutions for credit and debit cards with the Mastercard logo.

Understanding the Interbank National Authorization System (INAS)

Mastercard uses a peer-to-peer, edge-based network for processing its payment authorizations called the Interbank National Authorization System. This is a centralized computer system that allows Mastercard authorizations to travel directly from the merchant through the network to their endpoint without having to pass through a single, specific point first.

The INAS design makes Mastercard’s authorization network more resilient than that of competitors like Visa. That's because it means that one failure in the network won’t cause the failure of a significant number of other points in the network or for the entire network itself. Mastercard’s INAS also integrates centralized hub-and-spoke architecture, to be used with transactions that require more strenuous security measures.

MasterCard’s INAS uses sophisticated telecommunications and computing technology to receive and authorize payment requests, clear payments, and then settle payments via Federal Reserve wire transfers and the Automated Clearing House (ACH), which facilitates transactions like direct deposits, payroll deposits, tax payments, refunds, and utility payment services in the United States.

INAS is related to the MasterCard system Interbank Network for Electronic Transfer (INET). Both of these systems were combined into Banknet, a worldwide data communications network, in 1997. Together, these two systems facilitate all MasterCard transactions around the world. According to Mastercard's website, INAS and Banknet process and authorize transactions in 150 currencies in more than 210 different countries each year.

History of Interbank National Authorization System (INAS)

According to the company's website, Mastercard's origins go back as far as the 1940s. It began as The Interbank Card, which was established by a group of banks in California that formed the Interbank Card Association. This group consisted of Wells Fargo, Crocker National, United California Bank, and the Bank of California. The Master Charge card was launched to compete with Bank of America’s BankAmericard, which was later rebranded as Visa.

The Interbank Association began to automate its Master Charge authorization system in 1973, the same year it out the Interbank National Authorization System. The company introduced INET the following year. In 1979, the ICA changed the name of the card to MasterCard, which was later stylized as Mastercard. More than 22,000 banks in 210 locations and territories around the world issue MasterCards.

In 1984, MasterCard launched Banknet, which ties together all MasterCard data processing centers and issuing members into the world’s largest telecommunications network. Through Banknet, MasterCard can authorize credit card transactions from around the world in less than one minute. Banknet’s hub is located in St. Louis.