What Is the Difference Between Visa & Mastercard?

Take a look at the world’s top two credit card processing networks…

Updated: May 18, 2024
Matt Crabtree

Written By

Matt Crabtree

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There are essentially just four major players in the electronic payment sector. The vast majority of all card transactions occur via Visa, Mastercard, American Express, and Discover.

Since neither Visa nor Mastercard issues credit or plastic, they provide very different services. This implies that all credit and debit cards with the Visa or Mastercard logos are the result of a co-branding arrangement.

Even though neither company lends money or issues cards, they have joined forces to provide customers with the widest selection of payment methods possible.

Important Lessons:

  • When it comes to processing financial transactions, Visa and Mastercard are the two industry leaders.
  • Unlike Discover and American Express, Visa and Mastercard issue cards only via their network of participating financial institutions rather than to the general public.
  • Visa and Mastercard credit and debit cards are issued by member banks and credit unions directly to consumers and, in many instances, via co-branded credit card agreements with airlines, hotels, and major businesses.
  • Banks and credit unions are card issuers, whereas Visa and Mastercard are payment networks.
  • Visa and Mastercard are fairly comparable; card issuers, not the payment network, decide on most card-specific details. 
  • There are three tiers of cards within each payment system, however, they are mostly interchangeable.

Visa and Mastercard overviewed?

Your business’ needed infrastructure for accepting credit card payments can be provided by Visa and Mastercard. Check out our top payment machines

If you use a Visa credit card to make a purchase, for instance, the information from the store will be sent via the Visa network and then on to the appropriate bank or banks (including your own). 

Like Visa and Discover, Mastercard has its own payment processing network to handle credit card transactions. These two corporations handle more card transactions than any else combined, and their cards are accepted at a staggering number of locations worldwide. 

In most cases, you may use your Visa or Mastercard to make purchases. Credit cards such as Visa and Mastercard are issued by financial institutions at the discretion of the issuing institution. 

The company's logo will be prominently displayed on the card regardless of the network. It's not uncommon to find vendors that accept both Visa and Mastercard. The card issuer has the last say on the nature of each card, including but not limited to the interest rate, annual fee, rewards programme, and promotional offer.

All in all, Visa has been the market leader for debit cards in the United Kingdom, but that is about to change. Along with Virgin Money, Citibank, Clydesdale Bank, Yorkshire Bank, and Metro Bank, Santander and TSB will begin providing Mastercard debit cards in 2019.

Effects on business operations

When making a purchase using a credit, debit, or prepaid card, your transaction is processed by one of two companies: Visa or MasterCard. They act as a go-between for you, your bank, and the store you're shopping at. Both MasterCard and Visa go through the same procedure, which is to:

  • Find out from your credit card company whether it's safe to proceed with the purchase.
  • Verify with the store that your payment method is acceptable.
  • Handle the transaction by communicating with the merchant and your card issuer.

They represent the two largest data processing systems in the world. It's a frequent misunderstanding that they provide credit card services. That's the main distinction between the two most popular credit card processing networks and the likes of American Express and Discover.

Which is better, Visa or MasterCard (and why)?

The primary distinction between MasterCard and Visa is that each offers unique bonuses and incentives, albeit the terms and conditions of your card will depend mostly on the financial institution that issued it.

The encryption methods used by Visa and MasterCard are distinct. MasterCard also has a price guarantee. If the price of an item you purchased with your Mastercard goes down within 60 days of your purchase, MasterCard will often reimburse you the difference. However, it is also worth looking into whether or not your Visa card offers any kind of price protection.

Because of how similar Visa and MasterCard are, choosing one over the other shouldn't be overthought. The best credit card is the one that fits your needs and preferences. This might be because of the discounts available or the perks.

When used in a foreign country, the currency rate is somewhat different. They're both extremely close to the ‘market' rate utilised by currency dealers, although MasterCard has a little edge… Is there a distinction between the places that accept MasterCard and those that accept Visa?

When it comes to acceptance, Visa and MasterCard are almost identical.

Visa and MasterCard are two of the most widely accepted credit card brands worldwide. Neither Visa nor MasterCard has a clear advantage over the other when it comes to merchant acceptance. Both options are good ones to go with.

American Express is not the same. As a payment system, American Express is also available. However, the merchant will incur greater transaction costs as a result of your payment. This is why some stores refuse American Express: the added fees.

Visa and MasterCard are both often accepted for purchases while travelling internationally.

Is there a difference between Visa and MasterCard in terms of secure online transactions?

Yes, however, both Visa and MasterCard have their own online security systems to safeguard your purchases. This is a precaution against potential scams. 

  • Secured Code is a safety feature offered by MasterCard. 
  • Verified by Visa is a similar technique used by Visa.

Does Visa or MasterCard have any particularly special benefits?

When paying with a debit, credit, or prepaid card, you can take advantage of special offers made available by both Visa and MasterCard. Visa and MasterCard each provide a basic, standard, and premium grade of services.

However, not all cards issued by Visa or MasterCard have all of the perks listed below. This is because the network does not decide what perks should be made accessible to cardholders, but rather the card issuers do. 

Therefore, rather than evaluating different payment networks, it is more vital to choose a card issuer that offers the most value for you.

Basic

Both standard benefit packages often consist of perks like:

  • Both standard benefit packages often consist of perks.
  • Replacements urgently. 
  • Need to change card right away.
  • Warranty extending service.
  • Collision insurance for rented cars.
  • Visa provides protection against unlawful purchases. The risk of fraud is covered by MasterCard.
  • Discounts on event and travel tickets are another perk of using a MasterCard.

Mid-range

Signature is the name of Visa's mid-tier package. In addition to the standard perks, you also receive:

  • Coupons accessible online.
  • Discounts on lodging, meals, flights, and sports events.
  • Availability of a concierge at all hours.

World is MasterCard's mid-tier plan. The standard benefits, plus:

  • There will be a 120-day price guarantee.
  • Expert, personalised holiday planning.
  • Advantages at certain motels (such upgraded rooms and later checkout times).

Premium

All Visa Premium packages, including Visa Infinite, include Visa's standard and Signature benefits. However, it also has exclusive premium additions made with ultra-wealthy customers in mind.

Included in the World Elite MasterCard package in addition to the standard and world features are:

  • Rental cars at a discount.
  • Holiday packages and fare discounts.
  • Lounge privileges at the airport.
  • Safeguarding of all expenses.

How do I know which card to pick?

Well, there’s a lot to choose from; there’s a wide range of prepaid, credit, and debit card options from Visa and MasterCard. 

Credit card issuers and providers have varying advantages and conditions. Typically, financial institutions like banks and building societies issue the cards. Your preferred card will be determined less by the network on which it is accepted and more by your individual needs.

When choosing the finest credit card, it's much more vital to consider the perks offered by the card issuer than those offered by the payment network.

By weighing the benefits, you may choose the one that provides the most financial savings and/or the most desirable incentive for you, such as cash back.

An overview of Mastercard 💵

In 2020, Mastercard processed around £5 trillion in payments and earned £12 billion in net income.

Mastercard's main offerings include credit cards, debit cards, prepaid cards, and business solutions. Payment Solutions is Mastercard's only reportable business category, and it's broken down by geography in a number of different ways depending on where in the world you happen to be.

Mastercard, like Visa, relies heavily on service and data processing fees to rake in money. It presents the charges in a different light, however. 

Mastercard's service fees are based on a percentage of transactions processed in foreign currencies. Data processing costs, sometimes known as “switching fees” are a nominal, per-transaction, fixed expense levied on the issuer.

Standard, World, and World Elite are the three tiers of Mastercard cards.

An overview of Visa 💵

In 2020, Visa's payments volume was slightly higher, at around £7 trillion, resulting in about £17 billion in net revenue. 

Credit, debit, and prepaid cards, as well as corporate solutions and international ATM services, are Visa’s bread and butter. All of the following fall within the purview of the company's reportable business segments:

Comparisons…

The bulk of income for both Visa and Mastercard comes from service and data processing fees, albeit these are defined and structured differently by each company. The issuer incurs service expenses according to the amount of cards issued.

The issuer usually additionally incurs data processing costs, which are recovered via additional transaction fees levied on merchants. The expenses of delivering transactional information conveyed across the network are covered by data processing fees, which are often extremely tiny, set rates imposed on a per-transaction basis.

Visa is well-known for its three card tiers (classic, signature, and limitless). The issuer provisions for these types are all the same.

Who accepts them?

Due to the high level of confidence associated with both brands, Mastercard and Visa are accepted in over 210 countries worldwide. 

They have many similarities, which contribute to their mutual acceptance. Because the features that matter most to cardholders are independent of the card's brand, consumers can't really tell the difference between Mastercard and Visa. The issuing banks for each of these payment systems are the primary source of distinction between them.

Almost all businesses that take credit or debit cards accept both Visa and Mastercard. Visa has a 60% stake of the worldwide debit and credit card industry, Mastercard has a 30% share, and American Express (AMEX) has an 8.5% share. AMEX is less often accepted since its higher transaction fees reduce a store's profit.

Although Mastercard and Visa are generally accepted everywhere, there are certain unusual cases when they are not. In most cases, they result from a merchant's agreement to only accept payments from a single payment processor. However, offers with such limited availability are uncommon.

Merchants that accept Visa and Mastercard are expected to accept all Visa and Mastercard payment methods, as well as Mastercard's “honour all cards” guideline.

Comparing Visa and Mastercard: Conclusion

Visa and Mastercard are the two most common options when selecting a credit card, debit card, or prepaid card. 

These are the two most popular card processing businesses in the UK, with American Express coming in a close third.

Each Visa and Mastercard credit card is issued by a separate financial institution or other service provider, and these institutions each provide their own unique set of benefits and services to cardholders inside their own networks.

Since most financial institutions and card issuers don't let you choose between Mastercard and Visa, you should definitely give more weight to the specific card's characteristics and the issuer itself when making your selection.

There aren't many significant distinctions between the two networks, and you probably won't ever interact with Visa or Mastercard directly (instead, you'll talk to your card issuer). In any case, if you're torn between Visa and Mastercard, read on to learn how their features compare to one another.

Which card is superior, Visa or Mastercard, and why?

Visa and Mastercard are almost identical except for one key difference. Since both Visa and Mastercard are privately owned networks, neither can be used at stores that accept only one or the other.

The most important distinctions between credit cards will come from individual credit issuers rather than Visa and Mastercard itself. Keep in mind that not all card issuers provide access to the perks offered by the card networks.

Even though emergency help services are one of Visa's network perks, the card issuer could choose to not provide it for a particular card. While Mastercard itself does not provide rental vehicle insurance, other issuers may choose to do so for their customers.

Credit card issuers like Chase, Citi, Wells Fargo (or your credit union or community bank) choose the most significant characteristics, including interest rates, fees, and most rewards programmes. Cards from the same supplier may have vastly different rates, periods, and perks from one another.

Therefore, while comparing credit cards, the most important factors to consider are the annual percentage rate (APR) and rewards programme that fits your lifestyle and spending habits. 

If you often travel, for instance, you may want to look into the best credit card for travel rewards. A good cashback rewards credit card might be more practical if your primary goal is simply cost-cutting.

Related Guides:

FAQs

Does American Express have an online payment network?

What is Mastercard’s history?

When did Visa first begin?

In what ways are Visa and Mastercard equivalent?

Is there a difference between using a Visa or a Mastercard?

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