Visa vs MasterCard, Who’s the king of credit?

Visa vs MasterCard, Who's the king of credit?

Visa and MasterCard: The Big Picture

Visa and MasterCard are known as multinational financial services corporations. Both headquartered in the US and they both facilitate electronic fund transfers worldwide. Visa employs approximately 15,000 employees generating twenty billion dollars in revenue as of 2018. While MasterCard has just over 13,400 employees and has generated as of March 2019 $15 billion in revenue. They currently stand 18 places apart on the Forbes world’s most valuable brands list. With visa ranked at number 25 and MasterCard at number 43. But let’s take a closer look at what separates the two and who can be crowned king of credit.

The Beginning

Visa which was originally called BankAmericard was the brainchild of one of Bank of America’s employees Joseph Williams in the 50s. Williams observed that many Americans already had credit accounts with multiple merchants which clearly was not working out well as they had to carry a lot of carts and manage separate bills monthly. The American financial services industry realized there was a need to consolidate all of those credit accounts into one, But have yet to find a solution.

Williams studied the failures of the industry and those that were successful such as Sears and Mobil Oil. Ge convinced Bank of America senior executives to allow him to pioneer the idea of mass mailing unsolicited credit cards. By October the following year two million credit cards were issued in Los Angeles. And it was accepted by over 20,000 merchants in the state.

While MasterCard originally known as interbank in the 60s was created by a group of regional bank card associates to compete with Bank of America’s BankAmericard known today as Visa. This group was made up of both small and large banks that had their own credit cards. But they couldn’t compete with Bank of America so they formed an alliance with the interbank card Association.

Read More: 15 things you didn’t know about VISA

The Struggle

Being a pioneer in an industry comes with its advantages however you also have to deal with the process of working out the issues. Both a Visa and MasterCard had to deal with the delinquency of customers. Many of the accounts went into arrears and there were now circumstances where people engaged in credit card fraud. They had to deal with the backlash from politicians and journalists as their cardholder agreements held customers responsible for any fees. Even if they were the victims of credit card fraud. It’s estimated that the Bank of America lost approximately $20 million on the launch of BankAmericard during that period.

The way through Williams resigning Bank of America had to initiate their own efforts to salvage BankAmericard in the public eye. They implemented the appropriate procedures and controls as well as distributed over three million letters to customers across the state of California. Apologizing for issues arising out of instances of credit card fraud. By this time Bank of America and the interbank card Association were well aware of each other and the real tug-of-war for global dominance began.


Due to federal restrictions in the 60s US banks were unable to expand into other states. So Bank of America began licensing their card system to various banks creating their own network of banks that supported the BankAmericard system. They also continued the mass mailing of unsolicited credit cards until it was stopped in 1970. However, by that time over 100 million credit cards were already in the hands of the enticed American citizens.

During this time the ICA created a national bank called master charge, the interbank card, the ICA and Bank of America began to set their sights overseas both forming alliances to grow their network. ICA started an alliance with euro card and euro pay International which gave them access to the European market. Bank of America formed alliances throughout Canada, France, Japan, the UK, and Spain. By 1972 banks in 15 countries possessed licenses for the BankAmericard system and it was 4 years after that the network of banks decided to operate under one single name and entity. The name they decided on for this unified front was the visa.

The defining moment

Though credit cards technically existed before Visa and MasterCard became popular. We have to say the defining moment came with a successful introduction of the all-purpose credit card by Bank of America’s think-tank leader Joseph Williams. Being able to have one card instead of ten to make transactions definitely make it more convenient not to mention making wallets slimmer and purses lighter in a good way.

The Value

Let’s note that credit card companies like Visa and MasterCard do not issue credit cards directly to customers. They’re considered as payment networks banks, credit unions and retailers issue branded cards. The financial institution that issues the card is the one that sets the credit card’s limit, terms and conditions including all interest rates, fees, rewards and any other features. When a credit cardholder pays their bill it’s the institution that receives the payment and not Visa or MasterCard. Visa and MasterCard both have three levels each level with its own exclusivity and range of benefits. Both cards provide similar standard benefits such as protection against unauthorized charges, auto rental collision damage waiver and extended warranties.

As we look into the two upper levels of credit cards we see their benefits are also similar. Both credit cards come with a concierge that can schedule restaurant reservations source to avenge tickets, buy hard-to-find items and assist with gift purchases. Both also benefit from hotel and resort programs where if you book accommodations with a participating hotel, you receive special perks so later checkout times and free room upgrades. The only one up MasterCard has over Visa so far is their price protection benefit where you can purchase an item. And if the seller lowers the price within 60 days MasterCard will refund you the difference. And for the two higher-level cardholders that time is extended to 120 days.


MasterCard and Visa interestingly enough landed in the same pot of hot water multiple times. From being sued by ATM operators and closing settlements in the US Justice Department in antitrust cases. Maybe this was merely a coincidence. However, in December 2010 both Visa and MasterCard suspended payments to WikiLeaks. In response to this the group is notoriously known as anonymous performed a denial of service attack bringing their websites down for two days. It was stated that closing down payments to WikiLeaks could be seen as a violation of their freedom of expression. A year and a half later in Reykjavik, a district court ruled that donations via credit card payments should be allowed to the WikiLeaks site within two weeks or they would face a fine of $6,000 per day.

Read More: 15 things you didn’t know about MasterCard

The Results

Visa and Mastercards journey has both been long fueled based on the existence of the other. Visa overcame a slew of issues from the beginning. Bank of America had dealt with delinquent customers to credit card fraud. What worked for them as they made the proper alliances and brought on the right people at the right time to manage the business.
One such person was Dee Hawk a manager at the National Bank of Commerce Mr. Hawk was brought on to supervise NBC’s launch of their BankAmericard. However, later found himself as the key factor in managing the International BankAmericard program. In fact, it was Mr. hook that conceived the name visa when Bank of America’s Network agreed to operate under one entity. MasterCard took the same approach of forming alliances with other banks within the US and Europe.

However in addition they strengthened their position by acquiring companies along the way. In the early 2000s, MasterCard acquired data cash a UK-based payment processing and fraud management provider along with a pin and a rewards program management company from Australia. What we can learn from Visa and MasterCard is that competition can definitely be healthy. It can drive you to excel and keep you always looking for new ways to improve yourself.

The Future

MasterCard continues its trend of acquiring companies within the last two years it acquired BrightErion. A company that provides artificial intelligence and machine learning techniques. It could be interesting to learn master card plans for AI, especially as it comes a few years after their partnership with Apple to incorporate new mobile wallet features on the new iPhone models. Visa and mastercards future could possibly now lay in the hands of the ever-evolving blockchain technology which could bring about new competitors into their industry. Plus what would stop global giants like Amazon or Google from using blockchain to create their own payment networks? We don’t think MasterCard or Visa is going anywhere anytime soon especially as they keep developing their platforms for smartphone adaptations with the rapid increase in online sales and cashless transactions.


Visa and MasterCard both offer amazing benefits so it’s not so much a matter of choosing one over the other. It would be better if you focus on the bank that issues the card because they set the interest rates, the fees, the balance, transfer limits, and the reward scheme. We also know it’s not rare to find people with both credit cards in their possession. With options being this close we’ll have to leave it up to you to decide.

At one point in time, there were enough credit cards in circulation to wrap around the world over 3.5 times. According to financial reports of the top three largest credit card companies in the world. There were over 1635 million cards in circulation.

15 Things You Didn’t Know About MasterCard

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Written by SpaceRead

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