March 18, 2025 · 14 mins read
Santosh Kumar
Gone are the days when products were exchanged for barter or currency notes were counted and stacked in pockets and wallets. Today, you eye something, you buy that something, as we live in the world of digital payments. These digital payments have made our lives easier and more convenient.
A card is your passport to experience the world, relish the delights, all one swipe at a time. Before we move onto what is the difference between Visa and Mastercard, let us first understand what these companies do and why do we need cards in the first place.
Both Visa and Mastercard are American multinational payment card services corporations that facilitate electronic funds transfers throughout the world, most commonly through credit cards, debit cards and prepaid cards. Unlike Discover and American Express, Visa and Mastercard do not issue cards directly to the public but rather through member financial institutions. Member banks and credit unions issue Visa and Mastercard credit and debit cards directly to their customers and, in many cases, through co-branded credit card partnerships with airlines, hotels, and national retailers.
Before understanding what is the difference between Visa and Mastercard debit and credit cards, we must first know the variance between debit and credit cards. A debit card takes funds directly from your bank account, while a credit card is linked to a credit line that you can pay back later. The spending limit of a debit card is determined as per the bank account balance of the cardholder, whereas, in a credit card, it is the credit line determined by the issuer.
Certain benefits and perks are common for both Visa and Mastercard holders. To name a few, zero liability protection, insurance, travel assistance services, and more. However, there are certain benefits exclusive to each payment network. Additionally, certain rewards and perks are determined by the type of Visa or Mastercard you hold, for instance:
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Visa benefits
1: Emergency roadside dispatch
2: Extended warranty on specific purchased items
3: Collision damage waivers on auto rentals
MasterCard benefits
1: ID theft protection
2: Global service hotline
3: Free membership on select services
In certain cases, issuing banks do not give you the option to select between Visa or MasterCard. However, while applying for your bank card, you can check which payment network your bank is affiliated with and then send your application. And to understand which one is a better suited choice, we must understand the difference between Visa and Mastercard.
While Visa and Mastercard are both global payment networks that offer seamless payment experiences, the difference between Visa and Mastercard lies in service fees, card levels, security features, and exclusive perks.
The detailed difference between Visa and Mastercard is listed as below:
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While both corporations earn money through payment processing fees, However, we can understand what is the difference between Visa and Mastercard by studying the method of charging fees. The difference between Visa and Mastercard lies in the fact that while Visa charges data processing fees to the card issuer as per a per-transaction basis. Mastercard. On the other hand, charging issuing banks connectivity fees to use the Mastercard network itself at different stages of the payment processing workflow. To explain, Visa generally charges its service fees to the issuer based on card volume. The issuer, in turn, charges merchants per transaction to retrieve those fees. Data processing fees or service fees are often fixed in nature, and they don't cost much per transaction.
On the other hand, Mastercard negotiates service fees and calculates them as a percentage of global dollar volume. These fees are also relatively small, fixed amounts charged per transaction to the issuer. Instead of data processing fees, these are often called “switching fees”.
The noteworthy point here is that these charges differ for each issuing bank. Irrespective of the difference between Visa and Mastercard charging fee, there is one fee that remains constant: Standard Fee.
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While both Visa and Mastercard have 3 levels of cards issued to the cardholders, the difference between Visa and Mastercard lies in the nomenclature of each tier and the benefit each level holds for both the issuing corporations. The three tiers or levels of cards available to Visa cardholders are called Traditional, Signature and Infinite. At the same time, the Mastercard issues its cards compartmentalised into three categories: Standard, World and World Elite. To understand the difference between Visa and Mastercard-issued digital cards, we must closely examine the benefits provided at each level of these cards. For instance, A Standard Mastercard will have fewer benefits than World Elite cards issued by them. Additionally, the offers and discounts available on the cards issued by Visa and Mastercard are also different, even if the card is at the same level.
Both Visa and Mastercard have a complete acceptance being the global leaders and duopoly of digital payment cards. As a result, they enjoy undisputed global presence due to their identical global footprint. To speak statistically, Visa has reported that its payment network is accepted in 200 countries and territories around the world whereas the acceptance of Mastercard stands at 210. Additionally, there are currently more than 4.2 billion Visa credit cards in circulation.
However, the difference between Visa and Mastercard is in the volume and circulation of these. With a closer look at what is the difference between Visa and Mastercard, we found that Visa cards have a higher circulation and volume. This means that amongst the two, Visa clearly enjoys higher purchase volumes and wider circulation. However, what helps with the circulation and participation of these cards, creating all the difference between Visa and Mastercard distribution is the merchants these companies partner with. The kind of merchants and vendors onboarded to their platforms determine the discounts, offers and usability to the holder, thereby shaping his decision.
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As both Visa and Mastercard are digital payment companies, technology seems to be the backbone running both companies. Both companies are the flagbearers of payment technology innovations. They support contactless payments, mobile wallets, and secure online transactions. They continuously invest in new technologies to enhance the payment experience for their cardholders. Both Visa and Mastercard offer robust security features, including EMV chip technology and fraud detection systems. These features help ensure that your transactions are secure, whether you're shopping online or in-store.
While the need to have a secure and safe technological setup in place seems to be the point of commonality, the type of technology used is the difference between Visa and Mastercard. The necessary verification step is only to ensure that it is actually the cardholder authorising the transaction. This additional step helps prevent scams, thefts, cyber crimes and more. In an instance of using a new device or while making a large payment, the "Verified by Visa" step requires us to provide additional card information and password. On the other hand, SecureCode by Mastercard generates a private code or an OTP (One-Time Password) as an additional security step. To summarise, Visa emphasises transaction protection through "Visa Secure," which uses advanced encryption for online purchases. Mastercard employs "Mastercard Identity Check," combining biometric authentication and AI-driven fraud detection to enhance security.
Both Visa and Mastercard are pioneers of contactless digital payments and use networks to facilitate the same. Both Visa and Mastercard support card-on-file tokenisation (COFT), which enhances security by replacing sensitive card information with a unique token. This token is used for transactions, reducing the risk of fraud by ensuring actual card details are not exposed. This process secures online and mobile payments, providing an added layer of protection against data breaches. However, the difference between Visa and Mastercard lies in the network of contactless payment methods. The system used by Visa to enable contactless payment methods is payWave, whereas Mastercard uses PayPass. The mentioned contactless digital payment systems use Near-Field Communication (NFC) technology to transmit payment information between your card and the payment terminal. As a result, for a smaller amount, swiping the card or entering the PIN has been rendered no longer needed, and a tap of the card can help complete the smaller transactions. However, for larger amounts, entering the PIN is an added step to ensure security and prevent scams.
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While both corporations have an immense global presence, the difference between Visa and Mastercard accounts for the vast variance in market share. 60% of global market share is held by Visa whereas Mastercard enjoys a 30% market share. Another comparison in understanding what is the difference between Visa and Mastercard lies in their regional strengths. While Visa is dominant in Asia and North America, the undisputed winner in regions like Europe and Latin America stands to be Mastercard. The market share of each card is determined by the kind of partnerships that the two giants collaborate in. For instance, Costco in the USA does not accept Visa cards and taxi drivers in Singapore do not accept Mastercards. Usually, in India, it is up to the issuing bank to provide with either a Visa or Mastercard. However, some banks offer their customers an option to choose. Hence, it is basically the partnerships that the two giants form that will, in the end, determine the market share and regional strength of both.
A quick comparison between Visa and Mastercard might help the cardholders make an informed decision. The table below lists what is the difference between Visa and Mastercard for users to make that choice:
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Category: Type of Company
Visa: Visa defines itself as a financial service company that facilitates the electronic transfer of funds worldwide
Mastercard: Mastercard defines itself as a technology company in the space of digital payment processing
Category: Founded
Visa: Founded in 1958
Mastercard: Founded in 1966
Category: Headquarters
Visa: Headquartered in California
Mastercard: Headquartered in New York
Category: Types of Cards
Visa: Three tiers of cards that Visa provides are Standard, Signature, Infinite
Mastercard: Three tiers of cards that Mastercard provides are Standard, World, World Elite
Category: Acceptance Rate
Visa: 99% acceptance rate
Mastercard: 99% acceptance rate
Category: International Circulation
Visa: Visa enjoys a wide circulation of cards spanning 200 countries and territories.
Mastercard: Mastercard enjoys a wide circulation of cards spanning 210 countries and territories.
Category: Market Share
Visa: Visa enjoys a 60% market share
Mastercard: Mastercard enjoys a 30% market share
Category: Regional Strength
Visa: Visa is regionally dominant in Asia and North America
Mastercard: Mastercard shares a regional dominance in Europe and Latin America
Category: Reward programs
Visa: Visa offers cashback, points and miles programs to its cardholders
Mastercard: Mastercard offers cashback, points and travel rewards to its cardholders.
Category: Digital Wallets
Visa: Digital wallets supported by Visa cards are Apple Pay, Google Pay, and Samsung Pay.
Mastercard: Digital wallets supported by Mastercard-issued cards are Apple Pay, Google Pay, and Samsung Pay.
Category: Security Features
Visa: The security features of Visa are Visa Secure (3-D Secure), tokenisation, zero liability
Mastercard: The security features of Mastercard are Mastercard SecureCode, tokenisation, zero liability
Category: Transaction fees
Visa: The domestic transaction fees for Visa is around 1-3%
Mastercard: The domestic transaction fees for Mastercard are around 1-3%
Category: Popular Use Case
Visa: Popular use cases for Visa cards are e-commerce and travel industries
Mastercard: Popular use cases for Mastercard are the retail and dining sectors
Category: Fraud Liability
Visa:
1: Zero liability for:
2: Credit card transactions
3: Signature debit card transactions
4: PIN debit card transactions (if processed by Visa)
Mastercard:
1: Zero liability for:
2: Credit card transactions
3: Signature debit card transactions
4: PIN debit card transactions (if processed by Mastercard)
Category: Card Terms
Visa: Visa doesn’t set APRs, fees, or rewards.
Mastercard: Mastercard doesn’t set APRs, fees, or rewards
Category: Premium Cards
Visa: The premium cards for Visa are Visa Signature and Visa Infinite.
Mastercard: The premium cards for Mastercard are World Mastercard, World Mastercard, Elite.
Category: Currency Conversion Fees
Visa: The currency conversion fee for Visa is an average of 1-3% for international transactions.
Mastercard: The currency conversion fee for Mastercard is an average of 1-3% for international transactions.
Category: Customer Service
Visa: Visa offers 24*7 global support, emergency card replacement and dispute resolution.
Mastercard: Mastercard offers 24*7 global support, emergency card replacement and dispute resolution.
Category: Annual Fees (Premium)
Visa: Visa Signature: $0-$450, Visa Infinite: $450+
Mastercard: World Mastercard: $0-$95, World Elite Mastercard: $450+
Category: Payment Technology
Visa: The payment technology used by Visa is Visa payWave
Mastercard: The payment technology used by Mastercard is Mastercard PayPass
Category: Transaction Fees
Visa: Transaction fees charged are based on card volume
Mastercard: Transaction fees charge a percentage of global dollar volume
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In the discussion of what is the difference between Visa and Mastercard, there has been no stark winner. Both guarantee safe, secure and fast payments worldwide. Visa and Mastercard offer robust security, extensive benefits and widespread acceptance.
In order to understand which is better, we need to understand the difference between Visa and Mastercard depends on individual needs and specific perks based on card issuer. The answer to what is the best-suited card depends on the issuing bank, offer needed, discounts from merchants required, spending habits and financial goals. The difference between Visa and Mastercard lies in the special benefits offered by card issuer.
Both Visa and Mastercard offer travel benefits. Some Visa cards offer higher travel insurance coverage, whereas Mastercard provides better hotel and flight discounts. Please check foreign transaction fees before choosing a travel card.
In India, banks usually assign either Visa or Mastercard by default. However, some banks allow customers to choose their preferred network when applying online. Hence, please evaluate the reward program before choosing your preferred card application.
Visa and Mastercard charge banks and merchants different interchange fees, but users typically don’t notice a difference unless specific fees apply for international transactions.
Both Visa and Mastercard themselves do not issue cards. They license the rights to issue cards and provide the technology for the payment process to financial institutions, like banks and credit unions. These institutions decide transaction fees, rewards programs, and other cardholder benefits.
A credit score of 750 or more indicates your great financial trustworthiness and is generally regarded as favourable. Having a score like this shows that you have continuously paid back your debts on time, whether they be from loans, credit cards, or other sources of credit, maintaining a good credit history.
Secured credit card is a card that is issued against a collateral, like fixed deposit. This helps to reduce the risk level of card issuers. This card type is really beneficial for people with poor or no credit history. If the bill payment is not done in time, banks may deduct the amount from the fixed deposit that has been put as a collateral.
In case someone defaults on their payment, they are liable to pay interest rates. The easy way to calculate the interest due is by using the below formula.
(Number of days counted from the date of transaction made X Entire outstanding amount X Interest rate per month X 12 months)/365.
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