Base I

What is Base l?

Base I was the first electronic real-time authorisation system for credit card payments developed in 1973. This was carried out by the Bank of America. The base is an acronym for Bank of America System Engineering (BASE). The Bank of America issued a BankAmericard as part of the VisaNet system and today the card is marketed as a Visa card. There are two phases in the VisaNet system. Base I is the first phase and Base II is the second phase.

Before the Base I system could be developed, the credit card processing evolved alongside the growth of a national credit card system. The Base I system happened around the launch of the Visa card in the mid-1970s. Base I is the system through which traders would send a transaction approval request to the bank. This request would include a card number and a dollar amount. The bank would then choose to send an approval message or even decline a message without rendering any explanation.

The Base II system allows processing the end-of-day Reconciliation transactions generated by the Base I system. Through the Base II system, a periodical settlement would take place and settlement fees would be sent to the traders.

The time before Base I

Before the Base I system could be developed, there were closed-loop systems. This was native to a particular retailer or a group of traders with connections with a specific bank. Prior to this, all the money transactions were recorded via a phone Call from a trader to a local bank. A report was made holding a cardholder’s monthly statement.

Open-loop systems came out in 1966 with the development of the Interbank Card Association. It allowed transactions among the competing banks over a broader area. The Master Card brand soon took up from here and the Bank of America formed its own rival network, NBI, in 1970. In 1973, NBI acquired VisaNet and soon publicised Visa card as a completion with MasterCard. In the early 1970s, litigation allowed all member banks to join both the networks.