For the purpose of contrast, let’s start out with American Express. It’s obviously different from the other major CCs. You don’t get an AmEx card from this bank or that bank, there’s no Capital One AmEx card or Amazon AmEx card, you just get the thing from American Express, end of story. And you pay your bill in full at the end of the month (not counting the new “Blue” card), you don’t carry a balance and pay interest on it, and you are generally expected to pay an annual fee for it (occasionally waived). And there are things that the American Express card is regarded as “better for” (at least by some folks), travel & reservations for example, also regarded as good for standing behind customer in case of disputes.
You could list a different set of attributes for Visa. Lets you purchase things and pay back when you can afford to. Accepted nearly everywhere, whereas AmEx is not accepted in a lot of locations. Better at affiliated special offers like earning points towards free merchandise or reduced prices on various kinds of items etc… but such a list would be in contrast to American Express.
What’s the difference, historically and now, between Visa and MasterCard? Aside from possible variations in one given bank’s specific offering, or one company’s affiliation with only one of the two types of card, are there general characteristics of Visa (the once-upon-a-time BankAmeriCard, if I recall correctly) that are different from the corresponding aspects of MasterCard (the artist formerly known as MasterCharge)?
I don’t see much distinction there. And for that reason I wonder why one did not nudge the other off the map. Whichever one had lower market share would have little to recommend it, I’d think. Which brings up another point: they don’t seem to compete against each other toe-to-toe. Hardly ever see ads “Look what you can do with your VISA… can’t say that about silly old MasterCard!” or “MasterCard. Lets you obtain the goods and services you need. And accepted by many vendors who do not accept Visa!” Whereas AmEx and the Visa/MasterCard duet do advertise competitively against each other.
I’ve never seen them as being different. (My use of credit cards began in the mid to late 80s although I can vaguely recall the Bank-Americard and MasterCharge of prior years.) I remember signing up for cards where the bank even asked if you wanted a Visa or a MasterCard. All the other features were the same, and they were both from the same bank. I always figured it was similar to Buick and Chrysler of olden days* where they had cars that were essentially the same, but people perceived them as different. It never made sense to me.
If there are significant differences between Visa and MasterCard, I’d love to hear it and have my ignorance fought as well.
*(Are car companies still doing it? Some Buicks and Chryslers seem about the same, but I couldn’t tell you if it is to the same degree as a few decades ago.)
Visa and MasterCard are different consortiums (consortia?). Both systems are basically associations of banks which were formed in order to establish a world wide credit card franchise system, and most banks joined both systems so they can offer you both cards, usually at similar rates. Nonetheless, they are distinct bodies, and at leats theoretically, they are competitors. You note that they don’t seem to compete very strongly, and maybe there are concerted practices; after all, the participating banks obviously have no advantage of starting a credit card war between the two systems. But I wouldn’T say there is no competition at all. Both cards are marketed as distinct brands, and both systems run ads regularly. I heard that MasterCard’s policy as a FIFA sponsor is rather strict - in 2006, it was not possible to use any other credit card to purchase World Cup tickets.
In the case of MasterCard, it should also be mentioned that the company used the “Eurocard” brand in Europe after their merger with this European system until recently. A few years ago, they rebranded their European business.
It’s also correct that most locations which accept one of the cards will also accept the other, but this isn’t always the case. I remember that when I returned form a voyage to South America in 2004, I had to pay airport fee in Buenos Aires (It wasn’t included in the ticket fare; you had to pay the fee at a counter and present the receipt when boarding the plane). They accepted MasterCard, but not Visa.
A not-so-brief history of credit cards, By Emily Starbuck Gerson and Ben Woolsey
Good overall introduction, but despite the title, it is a little too brief. As I understand it, BankAmericard was a top-down system run by Bank of America, which got other banks to license the product, while Master Charge was more of a consortium of member banks. They had slightly different rules and regulations about how merchants paid, so for a long time it was common to find places that took one but not the other. And there used to be major differences in other countries, with one having a much wider range of acceptance than the other.
Most of whatever differences existed between them has been erased by competition, so the two are as interchangeable as can be 99.9% of the time. But like Coke and Pepsi, they both have large legacy audiences who have been using the products for decades.
Banks still tend to affiliate with one over the other, so there are probably differences in fee structures and suchlike that make them distinguishable in the issuers’ eyes. That’s why you see so much advertising for one or the other. They are great moneymakers* and it makes sense to try to get people to sign up with your bank.
- Until you get into a credit crunch and recession. Then the bottom drops out.
I was bewildered in Japan a few years ago by merchants’ acceptance of Visa but non acceptance of MasterCard. Up to that point I had believed the two brands to be interchangable.
Doesn’t the Olympics typically only take one card - as a money-maker, they make Visa and MC compete to be the “Official Card of the Olympics”?