Most people know Visa and Mastercards as credits cards and have possibly used them but they do not know the actual difference between two cards. Even though these cards have similarities such as their ability to be used when one is travelling to another country, these two cards are different.
Before looking at the differences between Visa and Mastercard, it is important to first understand that these two cards are not credit cards in themselves but are actually only payment methods. Neither Visa nor Mastercard issues any credit cards directly, they instead rely on banks, credit unions, and even retailers to issue credit cards with their names branded on it.
Since it is the financial institutions which issue credit cards on behalf of Visa and Mastercard, the financial institutions get to be ones to determine the terms and conditions. These include the interest rates, fees charged on the cards, and rewards among other card features. It is the financial institutions which receives the payment whenever a Visa or a Mastercard holder pays his or her bills with the card.
Given that it is the financial institutions that receive the money when a customer pays using either of the cards, one may wonder how the two companies Visa and Mastercard make their money. Well, Visa and Mastercard make money by charging a fee on merchants and businesses who accept their cards as methods of payment.
Interestingly, Visa and Mastercard do not see themselves as financial companies even though they their cards are used to process millions of financial transactions across the world. Visa calls itself a payment technology company while Mastercard refers to itself as a technology company operating in the financial industry.
What then are the differences between Visa and Mastercard? Well, Visa and Mastercard mainly differ from each other in terms of the perks each company offers to card holders. The financial institutions which issue Visa and Mastercards usually control things such as card limits and rewards and perks. Visa and Mastercard have to compete for the financial institutions and they therefore have to offer various perks to attract the financial institutions. It is this perks which usually sets each of them apart from the other.
The differences between Visa and Mastercard in term of perks are as follows:
In terms of travel, Visa offers emergency card renewal in one business day, covers the cost of vehicle for 15 days domestically and 31 days internationally, and allows 24/7 emergency toll free calls from anywhere in the world. Visa also covers accidents, towing cost, loss of use and thefts.
Mastercard on its part offers the following travel perks: a locator application that enables card users to locate ATMs or merchants in the places they are travelling to, 24/7 international toll free emergency services, and car rental collision on high tier cards.
In terms of security, Visa offers additional password protection to ensure safe online purchases for its customers. It also issues fraud alerts when unusual charges are detected. Visa however does not take liability for fraudulent cases outside of ATMs.
Even though Mastercard monitors fraud, it does not offer liability protection once loss of a card has been reported. Mastercard however assist customers whose IDs have been stolen to contact credit agencies.
Visa extends warranty by one year if the manufacturer’s warranty is 3 years or less. Mastercard on the other hand only extends warranty when the manufacturer’s warranty is one year or less. Also, Mastercard offers fuel rewards for certain spendings while Visa does not do the same.