Both offer convenient worldwide access, card security and other perks. But how do they actually compare?
When it comes to choosing a credit card, or even a debit card, Americans usually have the option of a Visa or a Mastercard. These two companies are the major card processing companies used in the United States, followed by Discover and American Express.
While each Visa or Mastercard credit card is independently issued by a bank or other provider, they also offer a range of features and services to customers across their networks. So if you’re trying to decide between these two options, here we compare Visa and Mastercard features side-by-side to see how they stack up.
Compare Visa and Mastercard secured credit cards
What are Visa and Mastercard?
Visa and Mastercard provide the technology and networks required for processing card payments. So if you make a payment with a Visa credit card, for example, the transaction will be processed on Visa’s network from the merchant to the relevant bank or banks (including your own). Similarly, Mastercard credit card transactions are processed via the Mastercard payment network. These two companies are the largest card processors in the world, and is accepted at millions of merchants all around the world.
Individual banks and other financial institutions issue Visa or Mastercard credit cards based on the payment processing network they want to use. Whichever network is used, the company’s logo will be visible on the card. Some issuers even offer both Visa and Mastercard options. In regards to specific card features, such as interest rates, annual fees, rewards programs and introductory offers, it is ultimately the card issuer that decides what will be available on specific cards.
Mastercard credit cards
What features and services do Visa and Mastercard offer?
Visa and Mastercard offer a wide range of features and services that banks and other providers can choose to include on their different cards. These include:
- Contactless payments. Credit cards with Visa payWave or Mastercard PayPass functionality allow you to make payments by simply tapping your card against a compatible reader. You don’t even need to enter a PIN if the transaction is worth less than $100, which can speed up the checkout process. For transactions over $100, you can still tap to pay, but will need to verify the purchase with a PIN. Contactless Visa and Mastercard credit cards can also be added to compatible mobile payment services that allow you to use your phone for purchases.
- Premium cards. Visa and Mastercard both provide a range of standard and premium card options, such as Visa Platinum, Signature and Infinite credit cards, or World Mastercard products. The features available vary based on the credit card provider but could include concierge services, global customer assistance, complimentary insurance and offers and privileges at a range of stores, hotels and restaurants.
- Exclusive offers. The Visa Entertainment and Mastercard Priceless programs provide exclusive entertainment, dining, travel and shopping offers and experiences to customers with a Visa or Mastercard (respectively). More premium cards may also offer a wider range of discounted services, as well as cruise and holiday packages that are exclusive to cardholders.
- Global security services. The Visa Global Customer Card and Mastercard Global Service support hotlines provide assistance if your card is lost or stolen, or if you have enquiries about your account. These services are available 24/7 from anywhere in the world.
- Online shopping protection. Both Visa and Mastercard offer programs that add another layer of security to online card payments. Verified by Visa and Mastercard SecureCode are optional services some providers may offer you when you use your credit card online. When you register for one of these services, you will be prompted to enter a password or unique SMS code when you make purchases at participating online stores.
How can I compare Visa and Mastercard credit cards?
Visa and Mastercard both offer worldwide acceptance and a similar range of features and services. Again, the features available may still depend on the actual card issuer. So rather than only comparing these two companies, it’s better to look at specific details for each card you’re considering. This could include:
- Annual fees. Most credit cards charge an annual fee, which could be as low as $25 for a basic card, or upwards of $700 for a premium option. The credit card issuer determines the annual fee based on the features available, with more perks usually equalling a higher cost. For this reason, Visa Platinum, Signature and Infinite cards, as well as World Mastercards, typically have higher fees because of the premium features they provide.
- Interest rates. Standard credit card interest rates can significantly increase the cost of the card you choose, so it’s important to look at both the purchase rate and the cash advance rate for each card you compare. Again, these rates are set by the issuer but tend to be higher for more premium products.
- Rewards. There is a wide range of Visa and Mastercard credit cards that are linked to rewards programs and frequent flyer programs. These products offer you points per $1 spent on purchases and usually include other additional features as well as higher annual fees than no-frills options. When comparing rewards cards, consider the earn rate, the type of rewards available and your average card spending so that you can decide if the annual fee will be worth it.
- Dual accounts. Generally, rewards credit cards processed on the American Express payment network offer a more competitive point earn rate than Visa or Mastercard options. As Visa and Mastercard have more extensive networks, though, you can use them in a wider range of locations. As a result of these different features, some card issuers offer accounts that come with both an Amex card and a Visa or Mastercard to help you maximise your rewards.
- Interest-free days. If you pay your balance in full by the statement due date, most credit cards will offer an interest-free period, such as “up to 44 days interest-free”. This feature allows you to make purchases while avoiding interest. It’s worth noting interest-free days are not applicable for cash advances, balance transfers or if you don’t pay your balance in full by the due date on your statement.
- Complimentary extras. Credit card providers may offer a range of additional perks, including complimentary insurance, concierge services, airport lounge access and flight vouchers. These benefits can add value to the card you choose if you use them, and vary significantly between products.
- Introductory offers. Credit card providers regularly offer new customers additional perks for a limited time, such as bonus points, 0% balance transfer interest rates or 0% purchase rates. These features are available for an introductory period and can add short-term value to the card you choose.
- Security services. In addition to the security services offered by Visa and Mastercard, credit card providers may offer 24/7 fraud-monitoring services, daily transaction limits or even the ability to temporarily lock your card if you have misplaced it. All American credit cards are also now chip-and-PIN products, which offer superior security for in-person payments when compared to cards that just have a magnetic strip.
Other details of Visa and Mastercard
While it’s definitely more important to compare individual credit card features when looking for a new card, if you’re still interested in the whole Visa vs Mastercard debate, here are some other company details to consider.
The history of Mastercard
Mastercard credit cards were originally developed in the US in 1966. This was during the early days of modern credit and charge cards, and there was huge demand for products that could be used to make payments at a wide range of businesses. This led to the formation of the Interbank Card Association (ICA) and the MasterCharge card.
The Mastercard brand officially came into effect in 1979, as an evolution of this card payment network. It continued to grow as a major credit card brand and officially offered an IPO through the New York Stock Exchange in 2006 (trading as MA). Along with Visa, Mastercard has been at the forefront of credit card technology developments for security and card acceptance, including the implementation of EMV chip credit cards and contactless payments.
The history of Visa
Visa’s history dates back to 1958 when Bank of America launched the BankAmericard. This was the first mass-marketed credit card program and it quickly grew in popularity.
By the 1970s, BankAmericard was an independent entity and went on to take the name Visa. Visa then launched VisaNet, which was the first electronic payment authorisation, clearing, and settlement system in the world. It has continued to grow as a card payment processor since then and, like Mastercard, has been at the forefront of technologies including chip cards and contactless payments.Back to top
How do Visa and Mastercard make money?
Visa and Mastercard’s profits primarily come from the entities that use their services, such as banks and merchants. Some of their sources of revenue include:
- Card issuer fees. Both Mastercard and Visa charge financial institutions service fees for the use of their payment systems.
- Bank settlement fees. Credit card issuers pay this fee at the time of settlement of payments.
- Overseas fees. These companies charge issuers a fee for processing payments made in a foreign currency. These charges are often passed on to credit card customers in the form of a foreign currency or international transaction fee.
Visa and Mastercard compared
|Size of companies||Visa||Mastercard|
|Market capitalisation (value)1||US $194.65 billion||US $110.74 billion|
|Number of cards in circulation||$2.1 billion||$1.2 billion4|
|Value of transactions per year||US $6.5 trillion||US $3.6 trillion5|
The details above show that Visa is by far the bigger company. However, in recent years, Mastercard has substantially increased its market share, bridging the gap between these two credit card giants.
|Number of countries||200+||200+|
|Number of merchants5||37 million (approx.)||37 million (approx.)|
|Number of ATMs||More than 2 million6||More than 1 million7|
|Winner?||A tie||A tie|
1 At October 2016 reported by Reuters 2 United States Securities and Exchange Commission, 2015 3 Mastercard on LinkedIn 4 Forbes, 19 June 2013 5 Digital Transactions, 4 November 2015 6 Visa website (October 2016) 7 Mastercard Global ATM Locator (October 2016)
In terms of card acceptance, the table above shows that the two schemes are roughly tied. Although Visa boasts a wider ATM network than Mastercard, neither of them state a specific number of ATMs and acceptance may also depend on your card issuer. As these details are also published online with no date to them it’s difficult to gauge how accurate they are, so we’ve called it a draw. As always, when choosing a card, make sure to weigh up all of its fees, features and benefits rather than just looking at which one is a Visa or Mastercard.
While there are differences between Mastercard and Visa on a corporate level, the variations are relatively minor when it comes to using a credit card processed by one of these two companies. In general, you’re better off focusing on features such as the interest rate, annual fee and complimentary extras available when comparing credit cards so that you can find one that suits your needs.Back to top