Why did Mastercard deploy Maestro instead of Mastercard Debit?

Question

This question has already been asked in the reverse form, "why Mastercard Debit if there is Maestro", and that answer is clear to me: Mastercard Debit is a better choice because it is supported worldwide. Maestro is largely European, with a few American and Asian countries that have support for it.

Maestro will be phased out from 2023 in favor of Mastercard Debit. To me this feels like Maestro has failed in favor of the system that has already been used for credit cards (with their system of Issuer Identification Numbers), before Maestro was even introduced in the early 90s.

It would have made international online shopping payments much easier for Europeans if they had used this system from the beginning. Why didn't they?

Answer 1

They were simply designed with different purposes in mind. Doing online (in the Amazon or eBay sense) payment frequently was simply not a feature Maestro had in mind. Maestro was a replacement for cash and traveller's checks. See also: Why do VISA "Electron" and Master Card "Maestro" cards have special limitations in when they technically work?

Maestro was the first online (as in communicating in real time, not in the eBay or Amazon sense) international point-of-sale debit network, to allow people to use debit cards anywhere at the point of sale, not just at ATMs. Back then, online banking was not really a thing (even phone banking at the time was a technological advance) and debit overdraft was not common.

Adopting the credit card system would still need extensive negotiation between MasterCard, banks and merchants, and changes still need to be made to the existing systems, both for MasterCard's transaction processing and banks' internal account management, because of the particularities of the debit system (always online, lack of overdraft, etc.). On the other hand, Maestro could take over existing ATM/debit interchange networks in a country more easily.

Credit networks on the other hand is by definition an offline network with an extension of credit on presentation of a card. Additionally, interchange fees were not limited by EU and due to reduced risks and protections Maestro fees were also lower.

Once it is established, it was not worth it to merge the two networks and replace all the existing infrastructures.

Now of course the world has changed and the demand for online (Internet) payment has grown significantly. The reduced fee difference, wide availablity of online (real-time) points of sale, enhanced service offerings of Internet banking and debit services, emergence of newly developed countries where legacy networks did not exist etc. make it desirable to no longer maintain two separate systems.

Answer 2

Mastercard - like Visa or Amex - are companies that earn money from credit card usage.
European banks were hoping to be able to establish their own solution where they make the money, instead of letting Mastercard / Visa / Amex rake in the billions. And that failed.