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Is Visa Better Than MasterCard?

Last Updated March 25, 2020

Most consumers don't really care if they have a MasterCard or Visa. Both operate in a similar manner and you can use each card in an estimated 30 million locations so why chose one over the other? Visa seems to be the bigger of the two firms because while they're proud to claim they have 2.4 billion cardholders in 200 countries MasterCard avoids direct comparison by boasting that they process 18 billion payments a year. You don't often find a place that takes one card but not the other, so do you need to choose one over the other?

Payment Methods

It seems that Visa is more popular than their rival, but let's not forget that neither company issues any credit cards themselves. They rely on banks and other financial institutes to do that. They are just the means by which the money is transferred. As they run payment methods that are almost universally accepted across the globe, they make it easier for banks to lend money to customers through credit cards. Visa makes money by charging an 'interchange fee' on each transaction. This amount, which is pre-determined, is paid when they process the transaction between the banks and the retailer. We have to assume that both Visa and MasterCard's interchange fees are very similar or one company would push the other out of the market.

Credit cards are not the same from cardholder to cardholder so it's not possible to say which one is outright the best on the market today. What works for you about a card might not work for others. Some cardholders can cope with a high APR rate because they take the reward points and then pay off the balance before interest is applied. Others want to park a balance on the card for a while without adding to it by spending on the card so they won't take advantage of any rewards no matter how enticing.

American Express

Besides the two big brands already discussed, who else is making money in this marketplace? American Express is the other major brand that comes to mind but they operate differently to Visa and MasterCard. The classic American Express is a charge card meaning that the balance at the end of the month is due in full. These cards offer convenience and short-term credit to the cardholder and in return AMEX charges an annual fee to the customer and a fee to the merchant on each transaction.

Other Visa Cards

Visa can also be used for debit cards and prepaid cards. Both can be used whenever you see the Visa sign so they're convenient ways of spending money. The prepaid card is a safer alternative to cash for those who distrust banks and don't hold a checking account. You can get text alerts or cellphone apps that show your balance, and if you get a card with direct deposit, you'll be able to get your paychecks or government benefits paid onto the card two days quicker than a paper check.

Changing a MasterCard to a Visa

Did you realize that in some cases you can call up your bank and ask them to change your MasterCard to a Visa? Although we've established that there's very little to choose between the two firms, there are differences. For example, they both offer international rental car insurance but there are differences in which countries each company will cover. If you want to switch between the two, call your bank and ask if it's possible. Some cards are available as Visa, MasterCard or American Express.

Visa's Future

Will products like Apple Pay and Google Pay see the end of Visa and MasterCard's domination of the global marketplace? At the moment those services simply store a cardholders debit or credit card details so they make spending on those cards convenient. Until a method of secure payment through the net can be established that cuts out the big two firms, Visa and MasterCard will remain key players in the market.

Clark Forges