When you pull out a card to swipe for a purchase, you’re likely using one of the four major payment networks: Visa, Mastercard, American Express, or Discover.
Visa and Mastercard tend to be the most popular because they are the most universally accepted and are issued through banks and other partnerships. This makes them different from other credit card processors because they do not issue their own cards. All cards are issued through co-branding relationships, like banks or corporations (think Delta, Costco, etc.). Through these partnerships Visa and Mastercard can offer a wide range of financial products with card usage.
Though similar, there are key differences between Visa and Mastercard services. We’ll break down all of these differences so you’ll know what to expect in terms of fees, travel, cash back, security, merchant acceptance, and more.
Issuer vs. Credit Card Network
A payment network processes the payments and assesses the transaction fees. The card issuer is the bank, credit union, or retailer that brands and manages credit and debit cards on the payment network.
While consumers are used to seeing the Visa and Mastercard logos on their credit cards, these companies do not actually issue the cards. Instead, Visa and Mastercard are card payment networks, and their partners issue cards that are connected to their networks.
Specific benefits and requirements of a credit card are usually contingent on the issuing institution rather than the network. The bank or retailer issuing the card will determine the features of the branded card and negotiate those features with the payment network. If you’re looking for a card that offers the best benefits for travel you’d do better to check the various issuer-branded cards under both Mastercard and Visa rather than comparing the two networks.
For example, if you travel often you may want to consider rental car benefits. Visa offers these benefits as a network, but the issuer of each specific Visa card chooses whether to include that benefit. Alternatively, Mastercard does not offer rental car coverage but some of the issuing institutions using Mastercard offer that as part of their benefits.
Visa offers credit, debit, and prepaid cards. These account for the greatest number of transactions, total purchase volume, and number of cards in circulation compared to other payment processors. Visa is also known for global ATM services, making it a popular choice for travel.
Visa generates revenue through service fees which are typically paid by the card issuer. In turn, the card issuer will charge a per-transaction fee to the merchant that is completed each time the merchant swipes a customer’s Visa card.
Visa provides three levels of benefits. Though these benefits are available, the issuer has discretion to include the benefits for their specific cards.
- Traditional: zero fraud liability, emergency cash or replacement for theft, auto rental collision damage protection, roadside assistance
- Signature: extended manufacturer’s warranty, annual spending summaries, travel & emergency assistance, concierge services
- Infinite: purchase & return protection, trip interruption & cancellation insurance, travel insurance, flight delay reimbursement, lost luggage reimbursement
Visa offers several cards with no annual fees, such as their Unlimited™ and Visa Signature cards. Other Visa cards may charge an annual fee of $35-95, with a few premium cards with annual fees over $100.
In general the Visa payment network offers excellent travel benefits, especially for Signature or Infinite cards. Visa offers a Southwest branded card that features points for flights and travel expenses, upgraded boarding privileges, TSA Precheck, in-flight wifi credits, and points for employee purchases.
Visa’s Chase Sapphire Preferred®, along with some other Visa cards, offer double points for travel and dining out, as well as 5x the points for Lyft rides. The Sapphire Reserved allows for lounge access and $300 travel credit each year.
Visa cash back
Visa offers cashback and rewards on every type of card, varying by issuer and card type. For example, the Chase Freedom Unlimited® offers 5% cash back on grocery store transactions with 1.5% on all other purchases. Cash back can be redeemed anytime and never expires.
Visa offers an OpenSky Secured credit card as well as a Petal credit card for those with no credit history, and First Access and Applied Bank Secured cards for those with poor credit. The Applied Bank Secured card does not require any minimum credit score and features a low, fixed APR, as well as monthly reporting to credit bureaus to rebuild credit. Most Visa cards require a good credit score (usually 670 or greater).
Like Visa, Mastercard offers credit, debit, and prepaid card options. Mastercard also offers a business payment processor called Payment Gateway Services. Mastercard trails Visa in terms of cards in circulation and payment volume, but is close behind (Visa made $23 billion in revenue last year, Mastercard made nearly $17 billion).
Mastercard makes money by calculating and negotiating service fees as a percentage based on the dollar amount, rather than a flat transaction fee. Data processing fees are flat fees per each transaction and are charged to the issuing bank or financial institution.
There are three basic levels of Mastercard benefits, which will interact with the issuers offerings for each individual card type.
- Standard: zero fraud liability, global service hotline for theft & fraud, and identity theft protection
- World: cell phone insurance, travel planning assistance, hotel rate & satisfaction guarantee, concierge services, luxury hotel benefits, memberships and discounts (Postmates, PGA golf offers, etc.)
- World Elite: increased cell phone insurance, discounts or credit at Lyft, Fandango, and Boxed.
Mastercard is known for offering a majority of cards with no annual fee, including Citi and Chase versions (Citi Double Cash, Chase Freedom Flex).
Mastercard partners with United Airlines and American Airlines for travel credit cards and miles. Mastercard World and World Elite cards are designed for global travel—they’re accepted almost universally, earn points for hotels, flights, and restaurants, and provide fraud and theft protection. Prepaid travel cards are also available.
Mastercard cash back
The Citi Double Cash card offers 2% in rewards and gives you 1% back when purchase and 1% back when you pay off the purchase. The Chase Freedom Flex offers 5% cash back on grocery store purchases as well as bonus categories that are announced each quarter.
Mastercard offers the Deserve and Jasper cards for students and those with no credit. For those with bad credit, Mastercard offers 20+ card options that are designed for rebuilding credit with monthly credit bureau reporting and no hard credit pull.
Where is Mastercard accepted vs. Visa?
Mastercard and Visa are accepted globally. This is one reason why even diehard American Express cardholders usually carry a Mastercard or Visa that they can use for travel. (Or in the event a merchant doesn’t accept American Express; American Express charges merchants a larger fee per transaction, leading many merchants to refuse processing.)
What stores accept Visa?
Visa is accepted by nearly all retailers in over 200 countries. A notable retailer relationship is with Costco Wholesale stores which ONLY accept Visa cards. Costco has established exclusive payment network deals in the past (first AmEx but now Visa), but most payment networks have an “honor all cards” rule which means that any Visa card is accepted by Costco.
What stores accept Mastercard?
Mastercard is accepted by nearly all retailers and is available in 210 countries. In the past, Sam’s Club had an exclusive deal with Mastercard’s payment network, but now accepts all types of cards. As noted above, you cannot use a Mastercard at a Costco Wholesale retailer.
Which is more widely accepted?
While Mastercard is available in more countries, the difference in merchants is negligible and domestic acceptance is in favor of Visa.
Which is more secure?
Both Visa and Mastercard offer zero fraud liability for all cards, which means that any user who is victim to fraud, theft, or breach of data will not be liable for the lost money. Both networks are generally considered to be secure, but use different methods for securing your data.
Verified by Visa
Visa utilizes this program to secure online purchases for Visa users. You may be prompted to answer additional questions or use biometrics to verify your identity and protect your information. It’s simply a branded form of multi-factor authentication (MFA).
Similar to Verified by Visa, the Mastercard SecureCode is an additional password that is registered with the issuing bank as well as Mastercard to provide you an added layer of protection for your identity and data.
Visa and Mastercard offer smart card functionalities in the form of EMV chip. EMV stands for Europay, Mastercard, and Visa, the original creators of the additional layer of security. The chips produce unique numbers for each transaction, helping to decrease fraud and counterfeit activity. Some of the cards offered by particular issuing institutions may feature virtual cards or additional smart card features.