Understanding the difference between Visa and Mastercard credit cards: Which is more profitable?

When choosing a credit card, you will surely find two logos: one with the word Visa and one with the word Mastercard. Both are payment service providers from the United States. Banks cooperate with these two companies so that the non-cash payment facilities they issue can be used worldwide. This includes credit cards.So, what is the difference between Visa and Mastercard? Let's find out more below!

What is a Visa credit card?

A Visa credit card is a credit card issued by a bank in cooperation with Visa Inc, a payment service provider from the United States. Therefore, this company "only" provides payment network services, while other facilities related to the credit card, such as discounts, eligibility requirements, interest rates, and so on, will be determined by the bank.

Reported by Motley Fool, Visa controls 37% of the global market share for payment network services. This means that about 37% of the world's credit cards have the Visa logo on them. Although this card can be used in 200 countries around the world, Visa credit cards tend to be more popular in Asia and Australia.

What is a Mastercard credit card?

Like Visa, Mastercard is also a payment network service provider company from the United States. Compared to Visa, Mastercard's market share is approximately 32%. Nevertheless, this card can be used in 210 countries worldwide, including Singapore and European countries.

It is not uncommon for someone to have two credit cards from both Visa and Mastercard simultaneously. The goal is to facilitate payments in certain countries or access facilities that are only provided by one of these companies.

Is a Visa or Mastercard credit card more profitable?

Visa and Mastercard only provide payment network services, while other specific credit card features are independently determined by the bank. Therefore, instead of comparing whether Visa or Mastercard is better, you can consider several other factors of this non-cash payment facility. These include:

1. Fees. In addition to the annual fee, credit cards have many hidden costs, such as interest charges, foreign transaction fees, penalties, and many others. However, if you use an Honest credit card, all these costs are combined into one administrative fee that you only need to pay if you are late in settling your bill, so you can shop more economically.
2. Facilities. Some credit cards come with additional facilities, such as travel insurance, free lounge access, and so on. Facilities like these usually depend on the respective policies, so one card can have different facilities even though it is either Visa or Mastercard.
3. Requirements and card limit. One of the requirements for getting a credit card is the amount of income. Cards with high credit limits usually require a minimum monthly income of Rp5,000,000 per month. This is because the bank wants to analyze the customer's ability to pay the card bill. Conversely, card limits with an income requirement of Rp3,000,000 are generally lower and more restricted.

The Honest credit card is an exception to this. With an income of Rp3,000,000 per month, you can already get this card. With a 90% approval rate, you have the opportunity to get a limit of up to Rp100,000,000 (one hundred million Rupiah), as long as you diligently pay your bills on time and save in the Honest Savings feature. Because it has the Mastercard logo, the Honest App can be used not only in Indonesia but also in 200 other countries around the world.

Although Visa and Mastercard have more than 70% of the market share of credit card network service providers globally, there are also other companies that provide the same services. Examples are UnionPay, which is widely used in China, JCB, which comes from Japan, or American Express (AMEX), which is also from the United States but is a different company. Whatever type of credit card you use, use this payment tool wisely.

Frequently Asked Questions

1. Is a Visa or Mastercard credit card safer?

Both Visa and Mastercard are safe to use for transactions. The difference lies only in their security methods.

2. Why was my Mastercard declined?

The reason your Mastercard was declined during a transaction could be due to an issue with the payment system at the place where you are transacting. Another reason could be that the retailer or the place where you are transacting works with a different card network.

3. Why was my Visa card transaction declined?

A Visa card transaction may be declined due to several possibilities, such as the card having expired, a suspicious transaction occurring, or other issues. You should immediately contact the bank's customer service (CS) to resolve the problem.