When we talk about high-profile business rivalries we think of the likes of Adidas vs Nike, Burger King vs McDonald’s, and Apple vs Android.
Making a decision between a set of these rivals largely comes down to your personal preference.
When it comes to credit card payment networks, there’s no denying Mastercard and Visa’s ‘top-dog’ status.
Visa and Mastercard are the two major credit card networks across the globe. Accepted in almost every country, the two payment networks dominate the market – but is there any significant difference between the two?
Read on and we’ll outline the similarities and differences between the two payment networks so you can decide whether it’s worth securing a card with one network over the other.
What are Visa and Mastercard?
Visa and Mastercard are both payment networks that process purchases when buying items using credit and debit cards.
Although it’s a common misconception, Visa and Mastercard don’t actually issue your debit/credit cards. Instead of sending Mastercard an application to get approved for a credit card, your credit card is issued by the bank, who set specific card features such as interest rates, annual fees, credit limits and rewards programs.
Payment networks like Visa and Mastercard act as the middlemen between financial institutions (banks) and merchants (retailers) by providing the technology and networks required for processing card payments. (If you want to know more, check out our how does credit card processing work post).
During the transaction process, the role of a Visa and Mastercard 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.
If you purchase an item with a Visa credit card, for example, the transaction will be processed by Visa, and the money will be transferred from the retailer to the relevant bank(s). Visa and Mastercard have identical processes using their own unique payment networks.
Individual banks and other financial institutions issue Mastercard or Visa branded cards based on which network they have a contract with.
Visa has generally been the dominant force in the UK debit card market, but 2019 saw a slight shift in the tide as Santander and TSB began issuing Mastercard debit cards alongside Virgin Money, Citibank, Clydesdale Bank, Yorkshire Bank, and Metro Bank.
Where are they accepted?
Both Mastercard and Visa are highly trusted so they are both widely accepted in over 210 countries across the globe.
One of the main reasons they are both so widely accepted is because they are so similar. From a consumer perspective, there’s no real difference between Mastercard and Visa because the benefits that matter most to card users aren’t determined by whether it’s a Mastercard or Visa. The main difference between the two payment networks are created by the banks that issue them.
Pretty much every merchant that accepts credit/debit cards takes both Visa and Mastercard. In terms of global market share, Visa holds a 60% share of the debit and credit card market, followed by Mastercard with 30%, while American Express (AMEX) accounts for 8.5%. AMEX has a lower acceptance rate as they charge higher transaction fees which ultimately costs the retailer more money.
Despite Mastercard and Visa’s worldwide acceptance, there are a few rare exceptions to the rule. Usually, they occur when a retailer (merchant) has an exclusive contract with one payment network. A notable example includes Costco Wholesale Clubs, which only accepts Visa Cards. These exclusive deals, however, are pretty rare.
Payment networks like Mastercard and Visa also enforce an “honour all cards” rule which means a merchant that takes Visa and Mastercard must take all types of Visa cards and all types of Mastercard cards.
What similar benefits do both Visa and Mastercard provide?
Visa and Mastercard tend to offer similar benefits. Some of these benefits are required by law while others have become an industry standard that credit card issuers expect for their cardholders.
Similar benefits include:
Fraud Protection – If your credit card (not applicable for debit cards) is used to make an unauthorised transaction, Visa and Mastercard will both cover the costs as long as you report it to your card issuer. You can also sign up to additional security measures when shopping online through the Verified by Visa Scheme or Mastercard SecureCode.
Auto Rental Car Insurance – If you rent a car using a Visa or Mastercard credit card, you are entitled to collision insurance. To be eligible, you must decline the rental company’s collision insurance package and pay the full amount using your credit card. There are some exceptions to the rule, so we strongly advise you confirm the details with the rental company before going forward with it.
Extended Warranties – Most Visa and Mastercard credit cards offer additional refund protection and warranties to cover any damage, theft, or misplacement.
Extensive Technology Options – Gone are the days of the simple chip and PIN. Both Visa and Mastercard support a range of online payment systems, contactless credit/debit cards, as well as smart wallet options such as Apple Pay and Google Pay.
Reward Cards are on offer – Both Visa and Mastercard work with card issuers who provide reward programs. These rewards credit cards can range from travel perks such as points towards discounts on selected hotels, airfare, restaurants, or even UBER. You can receive store-specific rewards for selected retailers on top of food and beverage rewards so you don’t have to miss out on that free Starbucks!
Are there any notable differences between Visa and Mastercard?
Is there honestly that much difference between Visa and Mastercard? For the everyday user, not particularly.
Visa and Mastercard are very similar for entry-level cardholders, although, you will start to see a couple of significant differences as you climb either networks’ card member tiers.
Tier qualifications – and their included benefits – depend on certain factors like your income, credit scores, and chosen card provider.
Visa and Mastercard both offer three-tier benefit schemes. The higher the tier-ladder you climb, the more exclusive offers you’ll receive. It’s also quite common for someone to own both a Mastercard and Visa card to benefit from all the perks – the best of both worlds!
Below, we’ve highlighted some of the minor differences for Visa vs Mastercard:
Conversion Rates – On the whole, Mastercard offers slightly better exchange rates if you purchase something in a foreign currency.
Price Protection – Arguably the most significant difference between Visa and Mastercard is that Mastercard offers price protection on all its cards. This means that if you have bought an item where the price is reduced soon after, Mastercard will reimburse you the difference. Standard Mastercards typically offer up to 60 days after purchase, while Mastercard World and World Elite Mastercard may offer it for up to 120 days. Certain Visa cards offer price protection too, just not all of them.
Purchase Protection – Have you bought a new bike, only to have it stolen a month later? Purchase protection might be able to help. Mastercard covers eligible purchases for up to 90 days after, as do Visa Signature and Infinite.
Return Protection – If a bust airline won’t accept your eligible refund, your return protection will step in and cash back as long as the purchase was made on your credit card. The majority of Mastercards come with “Satisfaction Guarantee” which usually offers refunds of up to £250 within 60 days of purchase. Visa only guarantees return protection with its Infinite and Platinum cards.
Visa Membership Tiers
Visa offers three levels of perks. In ascending order, they are: Visa Gold, Visa Platinum, and Visa Infinite.
Gold – Most Visa Gold benefits include car rental collision damage cover; extended purchase warranties; unauthorised purchase coverage, emergency card replacement, and access to Visa Luxury Hotel Collection, giving you exclusive benefits at 900 hotels around the world.
Platinum – In addition to all Gold Visa benefits, Platinum cardholders also receive extended warranty protection; an online portal that gives cardholders access to discounts, as well as medical and legal referral services.
Infinite – Infinite tier members benefit from all of the above, as well as: 24/7 concierge services; extensive travel insurance, VIP access to exclusive events and experiences, a wide range of premium merchant offers and preferential treatment at hotels around the world.
Mastercard Membership Tiers
Mastercard’s three levels of benefits are Mastercard Standard, Mastercard World, and Mastercard World Elite.
Standard – The benefits for the Standard Mastercard package are almost identical to that of the Basic Visa package. You’ll receive car rental collision damage cover; extended purchase warranties; identity theft protection and zero fraud liability; emergency travel assistance and emergency card replacement.
World – In addition to all your Standard-level perks, Mastercard World card holders will benefit from a dedicated personal advisor (similar to Visa’s concierge service); Price protection for up to 120 days; access to trip planning and travel benefits through Mastercard Travel & Lifestyle Services; added benefits at hotels (such as complimentary breakfast, late checkouts and room upgrades), on top of discounts and promotions with select retailers.
World Elite – World Elite benefits can be as luxurious as they sound. Alongside all the above benefits, World Elite cardholders will also have access to discounted service at participating rental car companies; reduced airfares; access to the World Elite Cruise and Vacations programs guide, which offers discounts on cruise holidays, golf holidays and other package trips.
Does it matter whether you have Visa vs Mastercard?
Although there’s not a whole lot of difference between the two payment networks, choosing your preferred credit card based on whose TV advert you enjoy the most might not be the smartest choice.
What matters most are the features outlined by your card issuer – annual fees, interest rates, rewards programs, sign-up bonuses and additional perks. So, instead of comparing Visa vs Mastercard, you should compare what issuers have to offer.
If you’re looking for a debit card, then you should base your choice on whichever current account suits you best. Alternatively, if you’re wondering what the benefits of a business credit card are, you should check out the perks that are most relevant to your own business to get the most out of it – both business and pleasure.
If you’re ready to save up to 40% on your credit card processing fees, be sure to try out our card processing fee comparison tool.