Can you guess what the difference is between these two credit card giants?
Visa and Mastercard are rival payment processors. They own the infrastructure that allows you to use your card all over the world. There’s not much difference between Visa and Mastercard. They’re accepted in a similar number of locations and offer similar benefits to cardholders. We have a look at whether there’s any real difference between Visa and Mastercard credit cards.
What do Visa and Mastercard actually do?
Visa and Mastercard do not issue credit and debit cards. They are issued by your bank or financial institution. Visa and Mastercard provide the infrastructure that allows you to make a card payment to participating merchants. Both Visa and Mastercard:
- Facilitate card payments by providing a payment network for merchants and consumers.
- Have an international reach so you can shop with your Visa or Mastercard card all over the world.
- Provide security for consumers against credit card fraud and unauthorised card use.
Press ‘CREDIT’ when you make a card transaction to use the Visa and Mastercard payment networks. Visa and Mastercard charge a fee to the merchant when you make a payment on credit. This fee is called an interchange fee and is commonly passed down to you as a credit card surcharge.
What’s the difference between processors and issuers?
Payment and card processors like Visa, Mastercard and American Express make credit card payments possible:
- Card processors.Visa and Mastercard are card processors, they provide the international network that lets you make a credit card payment. Card processors also offer a degree of protection from credit card fraud and set the rules about when you’re eligible for a credit card refund.
- Card issuers. Banks like the Commonwealth Bank and ANZ are card issuers. They distribute Visa and Mastercard credit cards to the general public. Card issuers also set the rewards program, credit card fees and rates of interest.
- Fees and charges. The card issuer is responsible for setting the credit card fees and rates of interest. However, Visa and Mastercard also charge a fee to retailers when you make a credit card payment. You may incur a credit card surcharge to cover the reasonable cost of processing the transaction.
How can I compare the features of a Visa and Mastercard?
On face value Visa and Mastercard credit and debit cards are similar products. The individual features of the product like the fees and benefits are set by the card issuer, but some of the common features you can compare include:
- Acceptance. Although Visa may have a marginally larger payment network, Visa and Mastercard products are accepted in a similar number of locations.
- Contactless payments. Both payment processors allow ‘tap and go’ payments using Paypass and Paywave.
- Currency conversion fee. Both payment processors charge a fee when the cardholders make a payment in a foreign currency. The fee is almost the same for Visa and Mastercard.
- Merchant fees. Visa and Mastercard charge a fee to merchants when a cardholder wants to make a payment over the Visa and Mastercard payment networks.
- Cardholder benefits. Mastercard and Visa offer early access to concerts, deals and discounts to their cardholders.
- Security. Both companies have measures in place to compensate cardholders who have been the victim of credit card fraud.
Do I have to choose Visa or Mastercard?
The card issuer sets the major features for each credit card. The annual fee, rates of interest and bonuses like rewards or travel perks are all decided on a card by card basis. The main concern is whether a debit or credit card is going to be accepted by the merchant. Visa and Mastercard cards are accepted in a similar number of locations all over the world. You’ll be hard pressed to find a merchant that will accept a Visa card but won’t accept a Mastercard or vice versa. Focus on the individual features of the product when you’re comparing credit cards, not the logo on the front.
Which should I choose?
Don’t let the choice between Visa and Mastercard weigh you down, there isn’t much of a difference between the two brands anyway. Instead, pay attention to the rates and fees charged by the card issuer as these features will vary between different cards regardless of whether they’re a Visa or Mastercard.
There is little difference between Visa and Mastercard cards. When comparing your options, you’re better off paying closer attention to the features of the individual product.
Frequently asked questions
Can I choose whether I get a Visa or a Mastercard credit card?
Most banks and financial institutions will offer products from Visa and products from Mastercard. It is not common for a financial institution to offer cards from both payment processors. If you find a card with features that you like, the payment processor comes as part of the package.
Is there any difference between Visa Paywave and Mastercard Paypass?
Mastercard Paypass and Visa Paywave is an in-built credit card technology that lets you make contactless payments. You can tap your credit card against the contactless reader and purchases under $100 are processed in seconds. There’s no need to enter your PIN. There is little difference between the two contactless payment systems. Transactions made using either contactless service must be under $100 and contactless transactions are protected from credit card fraud.
How do these companies protect my credit card?
Visa and Mastercard give a money back guarantee if you’re the victim of credit card fraud. There are conditions you need to meet to keep your account safe from fraud. However, most of these requirements are common sense such as keeping your account details a secret and notifying your bank as soon as you know about the unauthorised card use.