Electronic payments can be defined as a digital transaction between two parties. These payments include ACH, cards, bank transfers, digital wallets, mobile payments, and many more. When it comes to credit cards, the global electronics payment industry is dominated by four giants – Visa, Mastercard, American Express, and Discover.
From these four, it is Visa and Mastercard are arch rivals with distinct product offerings. Both these companies issue payment cards through co-branded relationships. Even as these two companies do not extend credit or issue cards, their product repertoire consists of credit facilities, and debit and prepaid card options are issued through various business partnerships.
Visa and Mastercard, both exclusively operate as network processors and are involved in all three areas of the payments market. The companies have similar business operations, offering payment cards to the public through partner member financial institutions. The member financial institutions issue cards either directly or in partnerships with airlines, hotels, or even retail brands.
Visa was founded in the year 1958 as BankAmericard, headquartered in Fresno, California. It was the brainchild of Bank of America’s in-house Product Development team, Customer Services Research Group, and Joseph P. Williams, its leader. In response to its then competitor, Master Charge, the BankAmericard program was licensed to other financial institutions in the year 1966. In the year 1970, Bank of America gave up direct control of the BankAmericard program and formed a co-operative with other various BankAmericard issuer banks to take over its Management. It was renamed to Visa Inc., in the year 1976.
Currently, the world’s second-largest card payment organization, Visa commands a 50% market share of total card payments. In the year 2020, Visa Inc.’s net revenue was a whopping USD 21.8 billion with a payments volume of USD 8.8 trillion. The company’s core product repertoire consists of credit, debit, and prepaid cards as well as business solutions and global ATM services.
Also an American company, Mastercard Inc. was founded in 1966 in Purchase, New York. The company has an interesting history, with it first being known as Interbank and then Master Charge before settling for its current name. It was created by an alliance of several banks and regional bankcard associations in response to the BankAmericard, which was issued by Bank of America. BankAmericard later became Visa, which is still Mastercard’s biggest global competitor. Mastercard Inc.’s, initial public offering was in the year 2006, when it became a publicly traded company. Before its IPO, Mastercard Worldwide was a cooperative that was owned by more than 25,000 financial institutions.
The year 2020 saw Mastercard Inc.’s net revenue at USD 15.3 billion with a payment volume of USD 6.3 trillion. The company’s core product offerings include consumer credit, debit and prepaid cards, and a commercial product business. Its business segment known as Payment Solutions, is broken as per geographical locations across the US and the world.
Both these companies are known for offering three different card levels. Visa offers traditional, signature, and infinite while Mastercard’s card offerings include standard, world, and world elite.
When it comes to credit card product comparison of Visa and Mastercard, it is only fair that the product offering of both companies is compared on similar grounds. Some benefits are common to both, some existing due to federal regulations while others have become industry standards, expected by issuers to be provided for their customers.
Zero Liability Protection
Both companies protect their user base against unauthorized charges. In the event a credit card has been used for fraudulent purchases, the user can report it to the issuer and have the card blocked and the transaction reversed. In such a scenario, the charges are borne by the card company.
Cell Phone Protection
This is also a service that is provided by both companies. Visa Signature members can get cell phone protection each month when they pay their wireless bill with their Visa card. On the other hand, World Mastercard offers a USD 1000 yearly coverage on cell phone protection in the event of a cell phone gets stolen or needs certain repairs, when the phone bill is paid with World Mastercard.
Global Emergency Services
Although both companies offer this service, Mastercard offers it for every card level available anytime, anywhere, and in any language. This helps in replacing a stolen card, access of cash advances, etc. Visa offers travel and emergency assistance services for Visa Infinite card holders that provide help in an emergency across the world.
Visa offers three tiers of credit cards to its customers – Visa Traditional, Visa Signature, and Visa Infinite. Visa Signature and Visa Infinite offer maximum benefits and perks. However, on the whole, Visa offers more benefits than Mastercard.
a) Purchase Protection and Insurance offers additional benefits to Signature and Infinite card users that include lost luggage reimbursement, trip delay, cancellation, and interruption reimbursement, extended warranty protection, zero liability protection, etc.
b) Visa Signature Luxury Hotel Collection offers its members special status at more than 900 participating hotels. This allows members access to seven premium benefits that include the best available rate guarantee, automatic room upgrade on arrival if available, complimentary in-room Wi-Fi when available, complimentary breakfast for two, USD 25 food or beverage credit, VIP guest status, and late checkout upon request.
c) Travel benefits for Signature and Infinite card members that include, Global Entry statement credits, Priority Pass lounge access, special Visa Signature offers, and rental car privileges.
d) Emergency Services that Visa provides for its members include important services like roadside dispatch, lost or stolen card reporting, emergency replacement, emergency cash disbursement, etc.
Mastercard too offers three different tiers of credit cards, with each one offering benefits and perks. The three different card categories include Standard, World, and World Elite. Below are some common benefits offered by Mastercard.
a) Purchase Protection and Insurance which is offered by all three cards with World and World Elite cards offering the most benefits. These include Mastercard ID theft protection, cell phone protection, global emergency services, etc.
b) Concierge Services is offered by World Elite Mastercard which can schedule restaurant reservations, and event tickets, or even help in purchasing items that are hard to find. There is no user fee attached to this card. World Mastercard users can use Mastercard Airport Concierge and special Golf Concierge service through Priceless Golf.
c) Mastercard Luxury Hotel and Resorts Portfolio gives World and World Elite Mastercard members access and upgrades at more than 3000 properties across the world. Depending on the property, the amenities can vary, offering complimentary daily breakfast, amenity credits up to USD 100, and other perks.
d) Luxury Event Deals offer access to many luxury events like special access to PGA Tour gold outings, access to Priceless Experiences that include film festivals and cooking lessons from private chefs, and many others.
The Better Card – Conclusion
Both Visa and Mastercard offer several advantages, some mandated by rules and regulations, others as industry norms demanded by end consumers. Each one has its benefits that appeal to individual consumers. While it is difficult to pinpoint a clear winner, both these companies are world leaders in their operational sectors. Depending on individuals and the benefits that most suit them, credit cards can be chosen.
When was Visa founded?
Visa was founded in 1958.
When was Mastercard founded?
Mastercard was founded in 1966.
What are the three cards offered by Visa?
Visa offers traditional, signature, and infinite credit cards.
What are the three cards offered by Mastercard?
Mastercard’s card offerings include standard, world, and world elite.