Visa vs. MasterCard: The Main Differences

Visa vs. Mastercard: An Overview

The electronic payments industry is dominated by four companies. Visa, Mastercard, American Express, and Discover are responsible for handling the majority of the world’s card payments. Visa and Mastercard present distinct offerings, as neither company is involved with extending credit or issuing cards. This means that all Visa and Mastercard payment cards are issued through some type of co-branded relationship. While the two companies don’t extend credit or issue cards, they do partner to offer the broadest array of products encompassing credit, debit, and prepaid card options.

According to the Federal Reserve’s 2025 Diary of Consumer Payment Choice survey, 29% of Americans preferred to pay bills with a debit card, while 33% preferred to use a credit card, meaning that 62% had at least one of the two. Many people have several of them, seeking to take advantage of all the rewards, cash back opportunities, and promotional benefits that issuers offer.

Credit cards often dominate the headlines, with nearly $1.3 trillion in outstanding revolving credit balances as of the end of the second quarter of 2025. Consumers are readily familiar with debit cards, which, along with credit cards and other forms of non-cash payments, accounted for around 205 billion payment transactions in 2021—representing $129 trillion in value—annually, according to the 2022 Federal Reserve Payments Study (the most recent available). As the financial technology market evolves, more prepaid card offerings are also being brought to market, generating around $294.44 billion in annual volume in 2020, an increase of 38.1% over 2019, no doubt fueled by the economic crisis of 2020.

Understanding Visa and Mastercard

Visa and Mastercard are the only network payment processors involved in all three areas of the payments market. Working exclusively as network processors, these two companies have a unique edge, but they operate differently.

Visa and Mastercard are both publicly traded. Visa (trading symbol V) commands a $660 billion market capitalization, while Mastercard (trading symbol MA) follows closely behind at $522 billion (market caps as of Aug. 13, 2025). As neither company extends credit nor issues cards through a banking division, both have a broad portfolio of co-branded offerings.

The business models of both companies are very similar. Visa and Mastercard do not issue cards directly to the public but rather through partner member financial institutions such as banks and credit unions. The member financial institution then issues cards for individuals and businesses, either directly or in partnership with airline, hotel, or retail brands.

Setting Terms and Conditions

The issuing financial institution sets the payment card’s terms and conditions, including fees, rewards, and other features. (Retailers usually work with a third-party financial institution.) For credit cards, the issuing bank is responsible for underwriting, interest rate structuring, and the full development of rewards programs.

Card issuers can also offer other perks, such as identity theft and fraud protection, car rental insurance, and business purchase discounts. While differences in interest rates, credit limits, rewards programs, and perks are controlled by the issuing financial institution, Visa and Mastercard compete for the co-branded relationship and take part in the drafting of card terms.

Overall, the card payment industry is complex, involving merchants, merchant acquiring banks, issuer banks, network processing, and cardholders. Network processors, specifically Mastercard and Visa, can structure their fees any way they like. This structuring and reporting is one of the most significant differences between the two largest network processors.

Visa Card Overview

In 2024, Visa generated $35.9 billion in net revenue with a payments volume of $13.2 trillion. Visa’s core products include credit, debit, and prepaid cards as well as business solutions and global ATM services. The company’s reportable business segments include the following:

• Service ($16.11 billion in 2024)
• Data Processing ($17.7 billion in 2024)
• International Transactions ($12.7 billion in 2024)
• Other ($13.2 billion in 2024)

Both Visa and Mastercard earn the majority of their revenue from service and data processing fees, but the two companies characterize these fees differently and have their own fee structures. Service fees are charged to the issuer and based on card volume.

Data processing fees are also generally charged to the issuer, who in turn retrieves these fees by charging merchants for each individual transaction. Data processing fees are typically very small, fixed fees, charged on a per-transaction basis, that cover the costs of providing transactional information communicated on the network.

In general, Visa is known for offering three card levels: traditional, signature, and infinite. These categories come with standardized provisions for issuers.

Mastercard Overview

In 2024, Mastercard generated total net revenue of $28.2 billion, with a payment volume of $15.8 trillion. Mastercard’s core products include consumer credit, consumer debit, prepaid cards, and a commercial product business. Mastercard has one reportable business segment, known as Payment Solutions, which is broken out by geographies across the United States and other countries.

Like Visa, Mastercard earns the majority of its revenue from service and data processing fees. However, it characterizes the fees differently. Service fees for Mastercard are negotiated and calculated as a percentage of global dollar volume. Data processing fees are known as “switching fees,” which are a small, fixed cost per transaction charged to the issuer.

Mastercard is known for offering three card levels: standard, world, and world elite.