One of our common misconception about the two payment processing giants, Visa and MasterCard is that they issue credit cards. But the fact is that they are not card issuers, as they are intermediaries between banks and customers. These two multinational companies provide end number of services to customers through banks, and so they do not have any interaction with the customers. While three level of services are provided by MasterCard, there are only two levels of services provided by Visa card.
As the two offers similar benefits offered by the two companies to the cardholder, it is a bit difficult to identify which of these two rival payment system is ahead of another. So, take a look at the article below, in which we have simplified the difference between Visa and MasterCard, for you.
Content: Visa Vs MasterCard
Comparison Chart
| Basis for Comparison | Visa | MasterCard |
|---|---|---|
| Meaning | Visa Inc. is a financial service company which facilitates electronic transfer of funds worldwide. | MasterCard Corporation is a technology company in the international payment industry, which processes payments. |
| Level of benefit | Two | Three |
| Market Capitalization | 192.34 Billion | 106.92 Billion |
| Revenue | 14.39 Billion | 10.19 Billion |
| Net Income | 5.56 Billion | 3.86 Billion |
Definition of Visa
Visa Inc. is a payments technology company; that ensures transfer of funds electronically throughout the world. It is a multinational corporation based in Foster City, California, USA. The financial service company is known for providing credit, debit and prepaid cards to individuals and business consumers.
Visa Inc. does not issue the credit card or extend credit directly to their customers, rather, they collaborate with banks and financial institutions, and provide them payment products under the brand name “Visa”. The banks and financial institution use these products to offer various facilities like debit, credit, prepaid, etc. to their customers. Therefore, the issuing company decides the interest, fees, rewards, etc. for Visa cards, offered by it and also the customers to whom the cards are offered.
Whenever the customer makes the payment through Visa card, it is the issuing company who gets the payment and not Visa Inc. However, the source of income for the credit card company is that they charge a small percentage to merchants and business for accepting Visa card, as a payment method.
Definition of MasterCard
MasterCard is a multinational payment technology company, which ties up with banks and financial institution to issue credit cards, with the view of processing payments. The company is based in Harrison, New York, USA and was earlier known with the name Interbank and Mastercharge.
The financial service company offers various products like credit, debit, prepaid and charge card, under the brand name, ‘MasterCard’, which are accepted by all the merchants worldwide. MasterCard does not issue credit cards or extend credit to the customers; in fact, it does not have direct interaction with the customers. But it is the bank or financial institution, with whom the company works, distributes the financial products to the customers. So, the fees, interest and rewards are set by the bank itself. Further, the decision to whom the card is to be issued is also taken by the bank.
As in the case of Visa Inc., MasterCard also makes money by charging a small percentage to the vendors for accepting MasterCard card as a method of payment.
Key Differences Between Visa and MasterCard
The following points are noteworthy so far as the difference between visa and master card is concerned:
- Visa Inc. is a financial service company which facilitates the electronic transfer of funds worldwide. MasterCard Corporation is a technology company in the international payment industry, which processes payments.
- Visa card provides two level benefits to its customers, i.e. base level and Visa Signature. On the other hand, three level benefits are provided by MasterCard, i.e. base level, World and World Elite MasterCard.
- The overall market capitalization of MasterCard on August 2016, is 106.92 Billion, whereas the total capitalisation of Visa 192.34 Billion.
- The revenue earned by Visa Inc. is 14.39 Billion, while that of MasterCard is 10.19 Billion.
- The net income of Visa Inc. and MasterCard is 5.56 Billion and 3.86 Billion respectively.
Similarities
Both Visa Inc. and MasterCard are a publicly traded American multinational corporation, which operate in financial service sector. These two are payment system, which has got worldwide acceptance. They provide financial products to their clients and act as an intermediary between bank and customer.
Conclusion
As these two financial service corporations are competitors, and that’s why their industry, sector, business, acceptance, is same. These two administer benefits such as shopping discount, rental car insurance, fraud protection and similar other perquisites.
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