What is a MasterCard and what is a Visa card?
If you’ve ever asked yourself ‘what is a MasterCard?’ or ‘what is a Visa card?’ This guide explains the similarities and differences between the two major payment networks.
Visa and MasterCard are both companies that handle transactions when you spend on your credit, debit or prepaid card. They’re the middlemen between you, your bank and a retailer.
The process that both MasterCard and Visa go through is to:
Check with your card provider if the transaction should be accepted or declined
Confirm to the retailer that your payment can be made
Process the payment between your card provider and the retailer.
They are the two biggest processing networks worldwide. They don’t issue credit cards, which is a common misconception about them. That’s the difference between Visa and MasterCard and other networks that handle card payments (like American Express and Discover).
Is American Express a payment network too?
American Express is a payment network too, however, there is one key difference to keep in mind. American Express is a credit card issuer as well as being a payment network.
Visa and MasterCard don’t give credit or provide cards whereas American Express and Discover (which is more commonly used in the USA), do offer credit and issue cards.
In the UK, credit cards are issued by banks and it’s the banks that set the fees and interest rates. The cards are co-branded, demonstrating the relationship between the card issuer and the processing network.
There’s not a lot of difference between Visa and MasterCard themselves. But there are some small differences, which we will look at in this guide.
What is the difference between Visa and MasterCard?
There are far more similarities between Visa and MasterCard than there are differences.
The main difference between MasterCard and Visa is that they both offer different extra benefits and rewards, although the bank issuing your card will have a far greater impact on your perks and terms of usage.
Visa and MasterCard do have different security schemes.
And MasterCard offers price protection. If you pay for something on your Mastercard and then the price of it is reduced within 60 days, MasterCard will usually refund you the difference. But you should check your Visa card, too, as some card providers have similar price protection policies.
As they’re so similar, it’s best not to focus too much on the difference between Visa and MasterCard when you’re choosing. You’re better off finding the right card for your own personal situation and lifestyle. This might be based on the rates on offer, or perhaps the benefits.
They also use slightly different exchange rates if you’re using them abroad. Both are incredibly close to the ‘market’ rate used by currency traders, but MasterCard has traditionally been very slightly better.
Is there a difference between MasterCard and Visa in terms of where you can use them?
There’s hardly any difference between Visa and MasterCard when it comes to where you can use them.
Both Visa and MasterCard can be used almost anywhere globally that accepts card payments, either in-store or online. A retailer would rarely accept one but not the other, so it isn’t a case of Visa vs MasterCard when it comes to where they’re accepted. Either would be a fine choice.
This isn’t the same for American Express. American Express is also a payment network. But it charges the retailer higher transaction fees to process your payment. That is why some vendors don’t accept American Express - because it costs them more.
If you want to use your card abroad, most countries accept Visa and MasterCard equally.
Is there a difference between Visa and MasterCard in terms of protection online?
Yes, although both Visa and MasterCard offer protection when you shop online through their own online protection schemes. This is to protect you against fraud.
MasterCard uses a protection scheme called Secured Code.
Visa uses a similar system called Verified by Visa.
Do Visa and MasterCard offer any perks?
Yes, both Visa and MasterCard offer deals that are only available to people who use their debit, credit or prepaid cards.
Both Visa and MasterCard have a three-tier benefits system ranging from basic to premium.
However, not all cards using Visa or MasterCard will come with the full suite of benefits listed below. This is because each card issuer determines the benefits available to cardholders, rather than the network deciding on the package. For this reason, it is more important to look for a card issuer that provides the best value for you, rather than comparing payment networks.
Basic
Both basic benefits packages generally include similar perks like:
Emergency assistance
Urgent card replacement
Extended purchase warranties
Car rental collision cover.
With Visa, you get unauthorised purchase coverage. With MasterCard, you get fraud liability protection.
MasterCard also gives you discounts on sporting and travel tickets.
Mid-range
The Visa card mid-range package is called Signature. With this, you get the basic benefits plus:
Discounts via an online portal
Deals on entertainment, dining, travel and sporting events
A 24/7 concierge service.
The MasterCard mid-range package is called World. You get the basic perks plus:
120 days of price protection
Dedicated personal travel advisor
Perks at certain hotels (such as room upgrades and late checkout).
Premium
The Visa Infinite package – and the others in the Visa Premium collection – gives you all the basic and Signature perks. But it offers additional premium benefits designed especially with super-wealthy clients in mind.
The World Elite MasterCard package gives you all the basic and World benefits, plus extras including:
Discounted car rental
Reduced airfares and holidays
Access to airport lounges
Security on all spending.
Which card should I choose?
Visa and MasterCard offer a variety of different prepaid, credit and debit cards. The terms and benefits vary depending on the credit card provider or issuer. Traditionally, the card providers are banks or building societies.
The best card for you depends less on the payment network and more on your specific requirements for a card.
The card issuer, rather than the payment network, typically determines the level of benefits that the cardholder will receive so it is far more important to look at the issuer benefits when deciding on the best card.
By comparing the advantages, you can find one that saves you money and or offers you the type of reward you want, like cashback.
Choose a credit card that suits you
If you need a debit card, look at which current account offers what you need.
Discover more about prepaid cards
As an enthusiast with in-depth knowledge of financial systems and payment networks, it's evident that both Visa and MasterCard play pivotal roles in facilitating transactions between consumers, banks, and retailers. Contrary to a common misconception, these companies do not issue credit cards; rather, they serve as processing networks on a global scale. My expertise extends beyond the basics, delving into the nuances that differentiate these payment giants and their counterparts.
Visa and MasterCard: The Basics
Visa and MasterCard operate as intermediaries, ensuring the seamless flow of transactions. Their primary functions involve checking with your card provider for transaction approval, confirming payment feasibility to the retailer, and ultimately processing the payment between the card provider and the retailer. Noteworthy is the fact that they don't issue credit cards, a key distinction from credit card issuers like American Express.
American Express: A Unique Player
American Express, while also a payment network, stands out due to its dual role as a credit card issuer. Unlike Visa and MasterCard, American Express issues credit and provides cards, giving it a unique position in the financial landscape.
Distinguishing Visa and MasterCard
While Visa and MasterCard share numerous similarities, subtle differences exist. The major contrast lies in the extra benefits and rewards they offer, although the issuing bank has a more substantial impact on the perks and terms of usage. Additionally, they employ slightly different security schemes and may vary in their exchange rates, with MasterCard historically having a slight edge.
Global Acceptance
Both Visa and MasterCard enjoy extensive global acceptance. The choice between them seldom revolves around acceptance, unlike American Express, which may incur higher transaction fees for retailers, leading some vendors to exclude it.
Online Protection and Perks
Visa and MasterCard prioritize online protection through their respective schemes—Verified by Visa and Secured Code. Additionally, both networks provide perks through three-tier benefits systems: basic, mid-range, and premium. The specific benefits, however, depend on the card issuer rather than the payment network.
Choosing the Right Card
The decision between Visa and MasterCard is less crucial than selecting the right card issuer. Each issuer determines the benefits, ranging from emergency assistance to travel discounts, and even concierge services. Comparison based on individual requirements, such as cashback or travel perks, is crucial in finding a card that aligns with personal preferences and financial goals.
In conclusion, my expertise in financial systems allows me to shed light on the intricacies of payment networks like Visa and MasterCard, offering a comprehensive understanding of their roles, differences, and the factors to consider when choosing the right card for individual needs.
