The Difference Between Mastercard and Visa: Answering Your Questions

Posted on April 9, 2021

Which is better? Mastercard or Visa? Have you been asking yourself this age-old question lately?

Trying to sort out the differences and understand the interest rates and annual fees can be overwhelming. Looking at the sign-up bonuses and the perks that come with each card are going to be your key.

Are you debating the difference between Mastercard and Visa?  They don't matter as much as you think.  

The First Thing You Need to Know

Both Mastercard and Visa are processing networks. They are not card issuers. This means that Mastercard and Visa are both companies that do the behind-the-scenes work.

They allow your payments to be processed. They provide the technologies that are needed for you to complete your transactions. Now, when you are making a payment on your credit card or deposit a cheque or cash, you are going through the card issuer. 

The card issuer is the financial institution such Royal Bank or CIBC. In other words, the processing networks decide where debit and credit cards can be used. However, they do not supply the financial backing. 

Financial institutions also set the important details like interest rates, annual fees, and the rewards or benefits that you receive. 

Differences Between Mastercard and Visa 

When we are looking at which card is better, we have to understand the differences between them. These distinctions between Mastercard and Visa are not as large as you may have thought. 

Where the Card Is Accepted 

In Canada, most retailers will accept both Visa and Mastercard as forms of payment. Even abroad in the US and other countries, you will not find many places that do not accept Mastercard or Visa.

There are two exceptions. In Canada, Costco and No-Frills only take Visa and not Mastercard. Deals like this typically occur when a merchant has an exclusive deal with one payment network. 

So, if you frequent either Costco or No-Frills then it might be in your best interest to carry a Visa. With that being said, exclusions are extremely rare. It would be more likely that American Express and Discover would not be accepted as a form of payment. 

There is even such a thing as "honour all cards." This is when payment networks require merchants to take all Visa cards if it accepts Visa. Same with Mastercard, if an establishment takes Mastercard it has to accept all Mastercards. 

Most banks offer both Visa and Mastercard options. However, it does happen where specific banks have partnerships with the processing networks. The financial institutions offer exclusive deals to customers with that company.

It is rare that you will find a financial institution that has a partnership with just one processing network. Although it does happen.

You will find that you can be issued a Visa or a Mastercard at most financial institutions. As well as use the card at most establishments or retailers. 

Card Levels 

When you hear people talk about tier levels with Visa and Mastercard, they are talking about the bonuses and perks that come along with that card. Tier levels can also indicate different income requirements or fees associated with the card. 

There are differences between what Mastercard offers in their tier levels compared to Visa. Let's look at the different tier levels of each card and see what they include. 

Mastercard 

The three levels presented by Mastercard are Standard, World, and World Elite. Mastercard typically has a modest annual fee and an income requirement of $60,000. 

Standard 

The standard card tier level is the lowest level card that Mastercard has. With the Standard card, you get emergency card replacement and identify theft protection. There is also a zero fraud liability. 

World 

The World package has the same benefits as the Standard package. Also, it comes with cell phone insurance and travel benefits. There is a Travel and Lifestyle Service through Mastercard.

You also receive promotions with certain retailers. 

World Elite 

World Elite is the top package offered by Mastercard. With this package, you get everything included with the first two packages. Plus golf benefits as well as other promotions and discounts through retailers. 

Visa 

Traditional, Signature, and Infinite are the tier levels with Visa. Typically, they require $120 annual fees. Your income does need to be around $60,000 as well. 

Traditional 

With Visa's Traditional tier you are receiving auto collision damage coverage, roadside assistance, and auto rentals. With the traditional package, there is also emergency card replacement and zero fraud liability. 

Signature 

This next tier is the Standard tier. This tier includes worldwide travel as one of its benefits. There is also extended warranty protection and all of the perks of the traditional tier.  

Infinite 

The Infinite package is the top tier that is offered by Visa. In this package, you get travel accident insurance, trip cancellation, and interruption. There is also lost baggage reimbursement.

Other benefits include purchase protection as well as all of the benefits listed on the Signature package.

The Benefits You Receive 

As you can see from the card tiers, one of the biggest differences is the benefits that you receive with the card. Most of the time the card issuer sets a lot of the benefits, however, Visa and Mastercard both have some influence over some of those options as well. 

For example, Mastercard offers you a membership on their Mastercard Airport Experiences. Visa works with a Priority Pass program that grants airport lounge access. 

You will see these benefits come into play with other things such as liability insurance and fraud protection. As you noticed from the card tiers, there are also things like emergency card protection and those features can make you feel more secure in your decision. 

The other thing that the card issuer is responsible for is the benefits such as what interest you will pay and the other fees associated with the credit card. Also if you get cashback rewards, that money is being paid by the financial institution and not the payment network like Visa or Mastercard.

It's All In the Details 

You now understand the biggest differences. Aspects like the benefits that you receive, the different card levels, and where the card is accepted. So it is time to look at the nitty-gritty details and see what it is about the cards you need to understand when making the decision about which card is best for you. 

Benefit Details to Watch for 

We now know that benefits can be one of the major differences between Visa and Mastercard. Here are some of the aspects that you may want to keep a close eye on when choosing between Mastercard and Visa. 

Conversion Rates When You Travel 

Mastercard is known to have better conversion or exchange rates when you are travelling and making purchases in a different country. If you are an avid traveller, this could be a swaying factor for you. 

Purchase Protection

Say something happens to a recent purchase you just made. A jacket gets stolen, or a new tennis racket gets damaged. This purchase protection insurance might just cover you.

Visa only offers this feature in some of its tiers where Mastercard covers your purchase for a specific time. You are eligible for this insurance up to 90 days after the purchase. 

Auto Rent Collision Damage Waiver 

If you rent a car almost every time you are travelling or for work, it is good to note that Visa does not set a limit on its loss-of-use coverage. Mastercard has a cap at $500. 

It is also important to note that a lot of rental car coverage depends on the card network, as well as the card issuer. So it is important to check and make sure you understand which card offers what auto insurance. 

In the end, it is all in the details. It is not a matter of which card is better. It depends on what you will be using the card for and what benefits matter to you the most. 

By the Numbers 

Looking at the numbers for each Mastercard and Visa, you can see the ever so slight differences. 

  • There are 8,500 Visa employees and 6,700 Mastercard employees 
  • It takes a Mastercard 130 milliseconds to complete a transaction and it takes Visa 221 milliseconds
  • There are over 522 million Visa cards in circulation today compared to the 551 million Mastercards.
  • There are also roughly 62.3 billion transactions that are completed by Visa every year. There are 25.4 billion transactions completed by Mastercard.
  • The average purchase amount is $57 for Visa and $60 for a Mastercard.
  • Both do have the same benefits when it comes to fraud liability. The liability is free with the card, and the transactions are processed by either Mastercard or Visa. 

You can see that there are differences between Visa and Mastercard companies. However, all of these statistics support the fact that Visa is slightly more popular than Mastercard. 

Visa Is More Popular Overall 

Visa is slightly more popular than Mastercard. Visa has the largest market share in the world. Visa has 48.8% of the market. Mastercard is the second most popular with 31.3% of the market share.

Visa is accepted by over 200 countries and over 28 million merchants or retailers. Mastercard is accepted in more than 210 countries by 30 million merchants as well. 

Another reason Visa is popular among the merchants is that they are looking to see how much people are spending each month. People have a larger monthly spending average with Visa over other network processors. 

The average monthly spending volume for a Visa holder is $315.50 compared to Mastercard which has a spending volume of $262.20.

So as you can see, the numbers are relatively similar. There is a reason why the companies are the first and second most popular card networks in the world. Cards like Discover and American Express are not as widely accepted internationally or in the United States. 

Let's Recap

With all that being said, do the differences between Mastercard and Visa matter? Which one is better? The honest answer? 

Neither card is truly better than the other. 

It is more a matter of what you need out of the card and the card features. The other important factor is the issuer or which financial institution you are getting the card through. 

Most likely, you are going to get more bang for your buck by looking at the offers that the individual banks are giving. Another factor that decides the benefits that you receive is going to be your credit score

No matter if you decide to go with Mastercard or Visa, the best credit score means the best credit card rewards. Also the lowest interest rates. 

Get the Best Prices

Look at the benefits offered and the perks of the card. Do a little bit of research and find out what the issuers are offering for both Visa and Mastercard.   To make it even easier, visit Insurdinary's credit card comparison page, enter a few quick details, and let the software make the best recommendation for you.  We are Canada's leading financial comparison platform, and are always here to assist you in making the best financial decisions.  Prefer to speak to an agent?  Contact us! We look forward to working with you.

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