While many people think of Visa and Mastercard as credit card issuers, they also operate payment networks, and it’s the major financial institutions that issue co-branded Visa and Mastercard credit and debit cards.
Mastercard vs. Visa Comparison
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The team at WealthRocket only recommends products and services that we would use ourselves and that we believe will provide value to our readers. However, we advocate for you to continue to do your own research and make educated decisions.
This comparison by WealthRocket focuses primarily on two titans of the financial world: Mastercard vs Visa.
Overview of Mastercard
Mastercard is a global payment network operator founded in 1966 and is based in the aptly named Purchase, New York.
The December 2020 edition of the Nilson Report, which provides an analysis of the global card and mobile payment industry, notes that Mastercard is widely accepted in over 70 million locations.
Mastercard’s annual report mentions that the company enables transactions in more than 210 countries and territories.
It also reiterates that it does not issue cards, offer credit, or determine the interest rate and annual fees on credit cards issued by financial institutions.
How Does Mastercard Work?
When you make a purchase, there are usually five participants involved in the transaction: you, the merchant, the card issuer, the acquirer (also called the merchant bank), and Mastercard.
And there are usually six steps involved in the payment process for Mastercard:
- You make a purchase
- The merchant sends your information to the acquirer
- The acquirer asks Mastercard to get the issuer to authorize the transaction
- Mastercard requests authorization from the issuer
- The issuer authorizes the transaction and sends the response to the merchant
- The issuer sends the payment to the acquirer who then pays the merchant
Features of Mastercard
There are many different types of credit cards available under the Mastercard name. These include rewards credit cards, balance transfer cards, and cashback cards.
Two of the more popular cards are the World and the World Elite, which include additional benefits not offered by your credit card issuer.
For instance, you can get free access to Boingo Wi-Fi (available in more than one million places worldwide).
Although the Mastercard World and World Elite cards don’t offer travel insurance, they do offer airport lounge access, purchase protection, rental car insurance, and much more.
Certain exclusions and terms and conditions apply so be sure to check with your financial institution to see what the card offers.
While there are typically no income requirements for a World Mastercard, the minimum income requirement for World Elite Mastercards is $80,000 a year with the annual fees ranging from $0 (PC Financial and Triangle) to $150 (BMO).
If you’re set on Mastercard, we’ve already determined the best Mastercard for every type of shopper.
Pros & cons of Mastercard
There aren’t many disadvantages with using Mastercard because of how widely accepted it is and the benefits that come with it. Here’s a list of the pros and cons.
Pros
Widely accepted around the world
Various perks such as access to Boingo Wireless Hotspots
Cons
Many of the travel-related benefits that come with World Elite cards aren’t as useful now due to the pandemic
WealthRocket's favorite Mastercard:
Tangerine World Mastercard
Rewards
- 2% Earn 2% cash back in up to three spending categories, when you deposit your rewards to a Tangerine savings account.
- 0.5% Earn 0.5% cash back on all other purchases.
- Welcome Offer 10% cash back on up to $1000 Terms and conditions apply
- Annual Fee $0 Learn how we calculate this.
- Annual Rewards $282
- Minimum Income Required $60,000 personal; $100,000 household
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Pros
- No annual fee
- Unlimited cash back
- Travel perks
Cons
- High qualifying income requirements
- Short period for a lower-interest balance transfer
- No annual fee
The Tangerine World Mastercard is a no-annual-fee cash back credit card designed for the everyday spender who also likes to travel. This card boasts impressive travel perks, such as airport lounge access and Mastercard Travel Rewards, making it an enhanced version of its counterpart, the Tangerine Money-Back credit card. That said, it does have higher qualifying requirements.
Overview of Visa
Visa is a San Francisco–based digital payment network operator that was founded in 1958.
Just like Mastercard, the Nilson Report’s December 2020 edition notes that Visa is accepted in 70 million locations around the world.
In its 2020 annual report, Visa announces that it facilitates payments in more than 200 countries and territories (slightly less than Mastercard’s 210).
Visa also notes that it’s not a financial institution, nor does it issue cards, extend credit, or set fees and rates for Visa product account holders.
How Does Visa Work?
Like Mastercard, there are five key players in the transaction process when using a Visa card: you, the merchant, the acquirer, the card issuer, and Visa.
Visa provides a simple example of how a transaction works through its payment network:
- You make a purchase
- The acquirer reimburses the merchant for the purchase
- The issuer reimburses the acquirer within one or two days
- The issuer collects the funds from you
Features of Visa
There are a number of different types of co-branded Visa cards, the common ones being Visa Classic, Visa Gold, and Visa Platinum. The benefits of these are very basic compared to the Visa Infinite cards.
Some of the travel and lifestyle offers, experiences, and events that you could get with a Visa Infinite card have been put on hold due to the pandemic. When it’s safe to resume traveling, though, you can get deals at more than 900 hotels that are part of the Visa Infinite Luxury Hotel Collection.
There are still some offers available if you don’t plan on traveling this year. The concierge services are helpful when looking for something to do or if you’re looking for difficult-to-find essential items during the pandemic.
Visa Infinite Privilege cardholders get the same benefits plus membership and six free visits to Priority Pass airport lounges, a security fast-track lane at select Canadian airports, and discounts for airport parking and valet services.
Most Visa Infinite cards have a minimum income requirement of $60,000 a year and an annual fee of $120 to $139.
In contrast, Visa Infinite Privilege cards typically have a minimum income requirement of $150,000 a year and an annual fee of $245 to $599.
Pros & cons of Visa
It can be a tough choice to decide whether to go with Visa or Mastercard. Here are the pros and cons of Visa to help you make up your mind.
Pros
Widely accepted in Canada and around the world
Good travel benefits with the Visa Infinite card
Cons
The difference in benefits: Airport lounge access is only available with a Visa Infinite Privilege card but the minimum income requirement is $150,000, whereas it is available with a Mastercard World Elite card but the minimum income requirement is only $80,000
WealthRocket's Favorite Visa:
BMO eclipse Visa Infinite
- Welcome Offer $335 (50,000 points)
- Annual Fee $499
- Regular APR/Interest Rates 20.99%
- Recommended Credit 660 - 724
- Annual fee ($120) waived the first year
- 60,000 welcome points (worth an estimated $400)
- 5 points per $1 on approved gas, grocery, and restaurant purchases
- 1 point per $1 on all other purchases
- Redeem rewards on travel, investments, experiences, gift cards, merchandise, statement credits
The welcome bonus of up to 60,000 points and the waived annual fee in the first year are great hooks, but the ongoing yearly fee should be considered against these benefits. While the travel insurance options could be much more robust and should include trip cancellation, the $50 lifestyle credit is a great added perk.
Our final thoughts
When it comes down to Mastercard vs Visa in Canada, there are a variety of co-branded cards offering a number of great benefits.
The two payment network operators have many similarities, so it isn’t just a case of which is better.
Deciding which card is best for you will depend on what rewards program most suits your wants and needs, as well as your spending habits.
That said, whether you choose Mastercard or Visa doesn’t matter as much as the credit card you end up choosing.
Craig Sebastiano
Frequently asked questions
There are some differences between Mastercard and Visa.
First of all, they are two separate companies operating payment networks that allow transactions between different participants to run smoothly.
There are also benefits that come with certain types of Mastercard and Visa cards.
Mastercard, for example, has its World and World Elite cards that offer greater benefits than regular cards. These cards may provide purchase protection, car rental insurance, special offers, and access to airport lounges.
The Visa Infinite and Visa Infinite Privilege cards also come with benefits. There are a number of offers related to food and wine, travel, entertainment, retail, and sports. There’s also a free concierge service available 24/7 that can help you plan a trip, for example, or make a restaurant reservation.
Here are some quick facts:
- Visa and Mastercard are each accepted by 70 million merchants, according to the December 2020 Nilson Report.
- According to their 2020 annual reports, Visa facilitates transactions in more than 200 countries and territories, while Mastercard enables transactions in more than 210.
Worldwide, Mastercard is accepted in slightly more countries and territories than Visa. In Canada, Visa and Mastercard are usually accepted at most stores that take credit cards.
There are a number of payment options, with American Express being one of the largest besides Visa and Mastercard.
Unlike the main two, American Express issues its own credit cards (while also operating a payment network), although Scotiabank does offer some co-branded cards too.
Unlike credit cards, American Express also offers charge cards that have no pre-set spending limit — but that doesn’t mean you can spend as much as you want.
Debit is another alternative, especially where credit cards aren’t accepted. Money is taken directly out of your account and you won’t have to worry about paying a bill later.
PayPal, which offers purchase protection, is a different payment option that some online retailers accept. However, neither debit nor PayPal have the perks that credit cards do.
