What is the difference between Visa and MasterCard?

MasterCard and Visa work very similarly to one another. They are payment networks, which process payments when you spend using your credit, debit or prepaid card. But they’re not quite identical.
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Visa and Mastercard

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.

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