What are the differences between cards Master, Visa, AmEx and others?Bank.pro Sales Team
Think of a rectangular, thin plastic or metal given to you by a financial service company that allows you to pay for goods and services or borrow funds to live your life, what comes to your mind? Cards! That is correct.
Cards are very important objects that must be present in our wallets these days. We cannot go anywhere without them, they come in handy at some point in our daily lives, when you are out shopping, booking your ticket for a vacation, making payment, or even making a transfer to a loved one or business partner.
That being said, it’s clear that there are so many cards, AmEx, Visa, MasterCards, and the likes. What makes them different and how do you choose one that suits your lifestyle? Let’s get to it!
What you should know about cards
There are four major electronic payment industries and credit card processing networks, they are Visa, MasterCard, Discover, and American Express (AmEx).
These card processing networks are responsible for every aspect of a purchase process, they also ensure a smooth transfer from one account to the correct recipient account, give travel benefits, protection from fraud, and acceptance or decline of a transaction.
Differences between the Visa, MasterCard, American Express, and other cards
Some key differences between these cards are:
- Method of operation: For these networks, there are two key terms to note: Issuers and payment networks. They form the first and most important difference between these cards.
Issuers: These are card operating networks that issue cards and operate as banks that handle financing with merchants and consumers. Take note that they are also payment networks. Example: MasterCard and Discover.
Payment networks: They are card operating networks that process payments, they do not issue cards or extend credit. Instead, they partner with member financial institutions like banks or co-branded credit card partnerships with institutions like airlines, hotels, and others.
This means that Visa and MasterCard users make payments or receive credit through their issuer which is usually a bank and if they have a complaint, it is made to the bank and not to the processing network. While American Express and Discover users make payments and receive credit directly from the network processors, hence why if there is a complaint, they make it directly to AmEx.
- Acceptance: Another difference between these cards is their acceptance. When you make a transaction, electronic payment companies make their money by taking a percentage from each transaction made through their network.
Payment networks with lesser fees are more readily accepted. American Express charges merchants higher fees compared to the others, so it is not accepted widely as Visa and MasterCards.
Research conducted showed that Visa and MasterCard had 52 million users worldwide, Discover had 44 million users, while American express had 25.3 million users. Less, in this case, is better than more!
- Eligibility: When it comes to requirements used for issuance, some processors have very strict rules. AmEx has a strict applicant eligibility requirement of 670 as a credit score, before issuance.
Unlike other processors, like Capital One which requires an applicant to have a “fair” credit rating. Although it has fewer perks and bonuses, its relaxed requirement is more customer-friendly.
- Network Coverage: These electronic payment industries have different network coverage across countries. Visa and MasterCard top the list with 200 and 210 supporting countries respectively, Discover has 185 while American Express has the least coverage with 130 supporting countries.
- Virtual Cards: MasterCard and Visa issue convenient virtual debit cards for secure online payments. A very popular service called InstaCard allows you to issue one-time cards for every online purchase.
- Co-brands and Partners: Recall that issuers are different from payment networks, hence there is more partnership with co-brands for payment networks.
Visa partners with Chase Bank of America, Wells Fargo, US Bank.
MasterCartners with Citi, Capital One, United, Suntrust.
American Express partners with Delta, Hilton, Marriott.
Discover partners with NHL.
Card operators differ, some more specific than others, with varying perks and advantages.
So, if you are to make a credit card operator choice, you need to have these points in mind:
- Make a research about their eligibility requirements.
- Take note of their specialization, are they issuers and (or) payment networks operators.
- If you require a network with wide coverage and acceptance, do your research and choose.
You should be armed with the right information you need on the difference between Visa, MasterCard, American Express, and other cards to make your choice. Enjoy the use of your cards across borders!