What Is Mastercard & Visa?

Mastercard and Visa are bank card payment networks that provide various financial services to banks and their clients. Both are leading credit card companies with payment accessibility options in different countries around the world. They are also both based on providing a payment method that charges interest on card balances targeting the financial organizations rather than the individual consumer.

Franchisor

Neither Mastercard nor Visa actually issue their own cards, rather they create a form of franchise where financial institutes use their services depending on the brand they choose. Mastercard and Visa market different financial brands through their parent companies. For example, Mastercard Worldwide has PayPass and Maestro while Visa has Visa Classic and Silver. These two companies simply create a network allowing clients to receive payment through their systems.

Payment Brand

Mastercard and Visa are a payment brands with a successful and secure payment network. They help link financial institutions and allow merchants to accept payments at different locations. The financial institutes set their own fee and rates without any input from the two companies.

Card Issuance

Mastercard and Visa do not issue cards or set percentages or annual fees on the cards, rather their customers are the financial institutions who become the managers of the cardholders and their merchants. They make money by allowing the retailer to use their payment system for a charge.

Processor

Both Visa and Mastercard's processing allows commerce to take place on a global level. Without companies to unify separate card issuers, cards issued by different financial institutes would have completely different policies and rates with no affiliation between them.

Financial Cards

Visa and Mastercard offer different card types for payment issuance and acceptance including debit cards, prepaid cards and credit cards. Customers do not need to worry about which card form they are using. Mastercard and Visa are both globally recognized and cards with their logo are accepted at a majority of merchants. The customer's concern should be the rate, annual percentage and other policies as set by his bank or the institution that is issuing the card.

Contactless Payment

Mastercard and Visa have both created contactless payment cards that allow cardholders to tap their payment device on a terminal rather than swiping it. The Mastercard brand is the PayPass, while Visa has created the Visa payWave.