How they work
They make money by acting as a third party between your bank and the point of purchases. They simply charge a transaction fee. They also deal with the interest rates, payment terms, late fees, penalties, rewards, credit points and free air times being offered to you. These things are decided by the banks or other financial institutions offering Visa or Master Card. Since millions of transactions are made on credit each day, banks always prefer to process transactions that are backed by secured payment networks like Visa and Master Card.
These payment networks acts as a third party and they have nothing to do neither with the interest rates charged on overdue amount nor on the rewards offered. However, they have their own and unique non-reward based arrangements known as “Perks”. Most commonly offered perks by these payment networks are fraud protection over your transactions, car rental insurances, travel insurance and protection on your purchases. So one way to choose between Visa and MasterCard is to analyze the perks offered by them and choose the one that best satisfy your needs.
Which is better between Visa and MasterCard?
In terms of these offered perks, Visa is considered little better than MasterCard. Firstly, Visa signature offers more cards with return protection while MasterCard offer this perk on limited cards. Secondly, Visa offers far better “loss of use” perk on car insurance as compared to MasterCard. Visa is also considered as more secure way of online payment as it offer betters security and fraud protection. But despite of this both entire have nearly equal brand loyalty and customer base.
Visa and MasterCard do have lots of things in common as both are just payment network and don’t issue credit cards directly to customers. The interest rate charged on these cards is decided by banks offering these cards or even set by legislation and interest rate is nearly the same on both cards. They both have worldwide acceptance with nearly 22 million outlets accepting these cards. All that makes us believe that there is not much difference between these two cards. They are just two different brands and intense rivals just like Pepsi and coke.
Whether to choose Visa or MasterCard is very much based on the brand preferences. As both of them can’t offer the rewards or charge interest rates on their own. One needs to think the terms of payment, interest rate charged and other things offered by the bank on these two cards and should choose the one which is better in term of satisfying their needs.