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Visa Vs Mastercard – Which is best?

The two biggest payment networks in the world - which should you choose?

If you’ve ever wondered what the difference was between Visa and Mastercard, you are not alone. Both are accepted around New Zealand and the average consumer will not notice any difference between the two.

Visa and Mastercard are payment networks so they don’t actually issue their own cards. Credit cards are issued by banks with Visa and Mastercard processing the payments between merchants (retailers or businesses) and banks.

These payment networks are the two largest in the world with other providers such as American Express taking up only a small share of the global market.

So what is the difference between Visa and Mastercard? Which should you choose? Let’s find out.

What’s the difference between Visa and Mastercard?

At first glance, there is not a big difference between the two and for the majority of Kiwis, either will suffice.

Visa and Mastercard are both widely accepted around the world as retailers are charged less fees than other cards like American Express.

You will find that almost everywhere where you can use a credit card for purchases, both are accepted. However, there are some exceptions that are more noticeable abroad.

Mastercard tends to have slightly better rates for foreign currency than Visa, so this could be a deciding factor for someone who travels a lot. Mastercard also has a longer list of benefits for its Platinum and World cardholders.

Do all banks issue both Visa and Mastercard?

In the past, some New Zealand banks offered both Visa and Mastercard credit cards to their personal customers. Now the trend is that each bank issues cards from just one of the payment networks.

Which payment network the bank has can change from time to time depending on which exclusive deal they have and the benefits that they see for themselves as a company and for its customers.

Due to this, it’s not uncommon for a bank to decide to switch from one to the other. A few years back, ASB moved all its customers to Visa with BNZ and Kiwibank recently following suit.

In a statement to the press in 2019, a BNZ spokesperson said that Visa had better security features with a platform that was able to detect fraud.

In 2019, Westpac made the switch to Mastercard, moving all its Visa cardholders across to the new payment network. While making the switch from one to the other may not worry the majority of people, some consumers do have a preference.

At the time of writing, there are no New Zealand banks that offer both Visa and Mastercard credit cards for personal customers. However, ANZ does have the Mastercard Cash Passport Platinum which is a card used for loading different currencies to use overseas. Kiwibank, who issues Visa cards, has a Mastercard for business customers.

Visa explained

Visa logo
The Visa story began in 1958 but the name Visa didn’t come into effect until 1976. A couple of years later the first traveller’s cheques were launched, and in 1983, an ATM network for 24/7 access to cash around the world.

Since then, Visa has been pioneering electronic payments with a goal to ‘provide the most secure and seamless payment experience possible’. Visa is now accepted in over 200 countries and has a series of benefits for its cardholders.

Visa dominates the New Zealand market with ASB, Kiwibank, ANZ, BNZ, TSB and SBS all issuing Visa credit cards to their customers.

Visa benefits

Depending on which type of Visa card you have, you may be entitled to the following benefits:

  • Zero fraud liability guarantee so you don’t lose out on fraudulent transactions
  • Discounts for online shopping, travel and accommodation with selected partners
  • Ability to connect your card with mobile payment apps like Google Pay and Apple Pay
  • Visa Platinum Concierge services when you need help with transportation, travel, dining and entertainment bookings around the world

Mastercard explained

Mastercard logo
Mastercard has been in existence for over 50 years. It launched Maestro, the world’s first global online debit program, in the 1990s.

Over the following decades, it has integrated operations with other institutions and launched innovative financial products to transform how people pay and get paid. Mastercard is accepted in over 210 countries and territories.

Currently, Westpac is the only major bank that issues Mastercard credit cards in New Zealand. ANZ has a multi-currency Mastercard for travellers, and there is also Q Mastercard for people looking for long term finance.

Mastercard benefits

Depending on the type of Mastercard you have, you may have access to some or all of the following benefits:

  • Extended warranty for goods purchased with your Mastercard
  • Purchase protection for goods purchased with your Mastercard that are accidentally lost, stolen or damaged
  • Local and global offers with Mastercard Priceless Cities
  • Offers for upscale retailers and world-class hotels with the World Mastercard Program
  • Global card assistance with Mastercard Global Services
  • Concierge services for organising dinner reservations, local transport, tickets and product sourcing
  • Zero Liability for unauthorised purchases on your Mastercard
  • Luxury travel benefits

Historically, Mastercard consistently outperforms Visa in GBP, USD, EUR, JPY, THB, SGD, CAD, MXP and AUD. Depending on the currency, you could save anywhere up to $15 on overseas transactions of $1,000.

Visa vs Mastercard: Which one should I choose?

With Visa and Mastercard being accepted all over New Zealand anywhere you can pay by credit card, you aren’t going to have too many problems here at home.

However, when you travel, there are still some places that will only accept one or the other. Some merchants may have an exclusive partnership with either Visa or Mastercard but this is more common to see in countries like the US rather than New Zealand.

It’s a good idea to research your destination before you travel and find out what payment methods are accepted. Some countries prefer cash to card for smaller expenses so you’ll need to make sure that you have enough foreign currency.

For those that make a lot of foreign currency transactions, you’ll also need to consider the slightly better FX rates that Mastercard seems to offer.

Compare features and card issuer rather than card networks

When deciding whether you should choose Visa or Mastercard, you should look at the bank issuing the card. Since New Zealand banks issue one or the other, your decision may already be made for you if you want to stick with the bank you have a relationship with.

While there are some benefits that you may get from each payment network, the interest rate, fees, features and rewards that your bank offers are in most cases going to be more important. Airpoints is the most common rewards programme found in New Zealand and this is available on both Visa and Mastercard with participating banks.

There are some exclusive perks for Visa and Mastercard, but the majority are for platinum and business customers.

If you are looking to sign up for a credit card for the first time or make the switch from your current one, these are the features that you should take into consideration:

  • Interest rate
  • Annual fees
  • Interest-free days
  • Reward programmes
  • Sign up bonus
  • Benefits

If you’re wanting to utilise Google Pay or other mobile payment apps, these are currently only available with certain Visa cards in New Zealand. Westpac, the only major bank with Mastercard, has its own version called Westpac Pay.

To sum up, the majority of Kiwis will not notice the difference between Visa vs Mastercard. However, if you travel and make a lot of foreign currency transactions, or want a Platinum, Black or Gold card with perks and benefits, you should consider the differences to find the right option for you. If you want the best of both worlds, you can consider having both Visa and Mastercard with lower limits on each to reduce the temptation of over spending.

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