Which credit card you should use: MasterCard or Visa?

Adhil ShettyBankbazaar.comBe it a credit card or a loan or a savings account, choosing the bank providing the product typically becomes the most important criterion. But, have you debated with yourself whether to go for MasterCard or Visa while going for a credit card? The logos of Visa or MasterCard are embossed on all credit cards, but majority of the cardholders do not distinguish them or try to understand how they are associated with their credit cards.Does a cardholder need to understand and choose between MasterCard and Visa? What are Visa and MasterCard anyway? Here are some answers to questions seldom asked.What are MasterCard and Visa exactly?MasterCard and Visa are the two largest electronic payment networks in the world. They are not issuers of credit cards. The cards, along with all the terms and conditions associated with it like the interest rates, card fees and other features are fixed by the respective banks only. Electronic payment companies like Visa and MasterCard are mediators who provide infrastructure, to connect the banks with the merchants who are accepting their card as a method of payment. They are not financial companies, but technology providers for the global payment industry.MasterCard- or Visa-branded payment products like credit, debit and prepaid cards are managed by these respective networking partners, linking you with your bank or card company, while you are making payments from a point of purchase.How it worksWhen you initiate a card transaction at a merchant’s outlet or at a payment gateway, the merchant submits it to their bank, for authorizing the card issuer. If there are enough funds available in the cardholder's account, the merchant's bank will authorize the transaction. And this communication between the banks happens through a payment network like MasterCard or Visa.At the end of a business day, merchant sends a consolidated list of sales receipts to their bank. The bank shares this with the appropriate issuing companies like MasterCard and Visa card. The bank subtracts a fee from the merchant for the transaction, which is shared with Visa or MasterCard. The card network sends the remaining amount from the card holder’s account to the merchant's account. And the merchant’s bank advances the final amount to the merchant.Most banks offer cards of both MasterCard and Visa as per their understanding with these electronic payment companies.Difference between Visa and MasterCardWith Visa and MasterCard being the global leaders in electronic payment networks, there is obvious competition between the two. To offset this, both companies offer perks to banks, which usually pass them on to the end users, ie, card holders.Some of the perks offered by these companies include travel covers, add-on services for travelers, discounts at certain hotels, discounts while buying tickets from certain airlines etc. These companies also offer concierge services for premium card holders. The higher the number of cardholders, the more leeway these companies get when negotiating fees with various banks and merchants. So, both Visa and Master cards have their own loyalty programmes like Visa’s SavingsEdge program and Easy Savings program of MasterCard. Also, different cards in the same payment network come with different benefits. For example, a Visa Signature cardholder will enjoy more enhanced features and purchase protection than a usual Visa card holder.Apart from these, there is not much difference between the two and all merchants accept both cards.So which one is better? As an end user, there is nothing to choose between the services of such electronic payment networks. The charges associated with your credit card are fixed by the bank and not by these payment companies. However, premium cardholders can look at the add-on services being offering by these companies, or go for specialized cards like Amex or Dinersclub and choose the cards that are offering privileges more relevant to you based on your lifestyle. Another option for Indian card seekers would be the RuPay card from the National Payments Corporation of India (NPCI).Both MasterCard and Visa are pioneering electronic payment networks and world leaders in their field. Almost every merchant accepts Visa and MasterCard oriented cards for payments and every bank issues them. If you are using cards in any remote areas, it may be a good to travel with both Visa and MasterCard cards to ensure that you can access your money anywhere.