What is the Difference Between Visa and MasterCard?
08 November, 2023
As you explore the world of Credit Cards, you will encounter two dominant payment networks in the global financial sector: Visa and MasterCard. Both of these payment networks are responsible for authorising and processing transactions made on their affiliated network’s cards. These networks connect your bank card to merchants, ensuring a seamless payment experience. However, you cannot directly get a Visa or MasterCard Credit Card. Instead banks and NBFCs partner with these payment networks to offer Credit Cards. If you are wondering which payment network is better for you, this guide will help you decode the difference between Visa and Mastercard.
Visa Vs MasterCard: An Overview
About Visa
Visa, a popular payment network, began its journey in the 1950s with the launch of the first consumer Credit Card offered by Bank of America in the United States of America. It now has a global presence, enabling customers from across the world to make card purchases effortlessly, while eliminating the need for cash. While the Visa network initially offered only Credit Cards, today it also provides Debit, Prepaid, and Gift Cards. Visa cards are widely accepted worldwide, enabling users to convenient use them for payments in different countries. Transactions with Visa are processed through the Visa network by partnering financial institutions.About MasterCard
Recognised as one of the world’s largest payment networks, MasterCard was created by a group of banks in the 1960s to compete with Visa's payment processing monopoly. Today, many global financial institutions partner with the network to offer MasterCard-branded cards. These Credit Cards, Debit Cards, and Prepaid Cards exclusively utilise the MasterCard network for all transactions. With its presence across 210 countries and territories, MasterCard is widely accepted. It primarily generates revenue through gross dollar fees from card issuing institutions and businesses that accept payments made via MasterCard-enabled Debit and Credit Cards.
Points of Difference Between Visa and Mastercard
Visa and MasterCard differ in terms of the following aspects:
Service Fee
Both Visa and MasterCard earn revenue through the payment processing fee. However, the method of charging fees differs. Visa charges the card issuer on a per-transaction basis or based on the card volume. Contrarily, MasterCard charges card-issuing institutions based on the percentage of global dollar volume. Global dollar volume refers to the total volume of all transactions made using MasterCard-enabled cards within a specific period. These charges differ for card-issuing institutions and not the cardholders. Hence, your card issuer levies a standard fee, which remains unaffected.Card Levels
Both MasterCard and Visa offer different card variants to match your varied needs and preferences. Visa is available in three tiers – Traditional, Signature, and Infinite. The benefits offered on your Visa card may differ based on the card category. Contrarily, the three tiers of MasterCard are Standard, World, and World Elite. Each tier comes with varied benefits. A Standard MasterCard will have comparatively lower benefits than a high-level MasterCard like World Elite.Circulation & Partnership
While acceptance is not an issue for both MasterCard and Visa branded cards as they both enjoy a global presence, the circulation and volume of Visa and MasterCard differ. Visa is comparatively widely circulated, which leads to higher purchase volumes by card issuers than MasterCard. Also, the efficiency of transactions depends on the exclusive partnerships that Visa and MasterCard strike with merchants who typically decide which payment network, and by extension, Credit Card they prefer.Contactless Payment Medium
Both Visa vs MasterCard payment networks facilitate contactless payments, but the system used for contactless payment differs. Visa uses payWave, whereas MasterCard uses PayPass. These contactless payment systems use the Near-Field Communication (NFC) technology to transmit payment information between your card and the payment terminal. Hence, you need not swipe your card or enter your PIN. You can simply tap or wave your card to make small purchases. That said, for larger transactions, you might need to provide your PIN.Technology
Technology backs the contactless transactions you make using Visa and MasterCard. To promote safe online transactions, both Visa and MasterCard emphasise security. The difference between Visa and MasterCard’s security integration is the technology used. Verified by Visa scrutinises your transactions to ensure purchases are authorised by you. If you use a new device or make a large payment, you are required to provide more information and your password. Likewise, SecureCode by MasterCard generates a private code when you use the card for online shopping.
Visa vs MasterCard: The Benefits
Both Visa and MasterCard offer similar basic benefits like zero liability protection, insurance, travel assistance services, and more. But some benefits are exclusive to each payment network. You can check out the specific rewards and perks based on the type of Visa or MasterCard you get:
Visa benefits
Emergency roadside dispatch
Extended warranty on specific purchased items
Collision damage waivers on auto rentals
MasterCard benefits
ID theft protection
Global service hotline
Free membership on select services
Which one Should You Choose?
When it comes to choosing between Visa vs MasterCard, you can rest assured that payments from both networks are globally accepted. In many 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 to, and then send your application. Whether you have been issued a Visa or MasterCard, you will enjoy a seamless online and offline payment experience.
Get Your Preferred Banking Card from HDFC Bank
If you want to access Visa and MasterCard payment cards, HDFC offers Debit and Credit Cards under both the payment networks. Each card comes with unique benefits and offers. The type of Debit Card you get depends on your net worth, whereas Credit Cards are offered based on your income, credit score, and other eligibility factors. You can compare the range of banking cards available at HDFC Bank and enjoy a seamless banking experience.
Apply for HDFC Bank Debit & Credit Cards to experience convenience and security.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals at the sole discretion of HDFC Bank Limited. Credit Card approvals is subject to documentation and verification as per Bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.
