MasterCard and Visa Card are special types of prepaid cards that are convenient for cash payments. Traditionally, people carried cash around, especially when traveling. The impracticality of carrying cash soon became obvious. First, inflation caught up, making notes of lower denominations “valueless”.
Over a period, it didn’t make any sense to be carrying cash around as the amounts required
never seemed to fit in even in the larger wallets.
Around the same time, innovations in electronics and electrical technologies led to new types
of developments such as credit cards, debit cards, and prepaid cards.
MasterCard and Visa Card are therefore contemporary payment methods incorporating electronic technologies.
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Basically, both are cards offered by payment processing businesses. These businesses have ties with
the banks to issue their cards.
Therefore, people can buy MasterCard or VisaCard only from banks. Banks charge interest on the amount
covered under the card.
The payment processing companies collect charges from various retailers to whom the card is presented.
Effectively, nobody is a loser in this type of transaction. The customer gets the required convenience and
security of the prepaid card, the bank gets its interest rate, and the retailer is assured of a better customer, who pays promptly. The payment processing company gets its commission for indirectly directing the customer to the retailer. In addition to bank charges, there are other charges such as annual fees that are payable on such cards. When faced with a choice such as MasterCard or Visa Card, it becomes necessary to identify what is needed and which of the two products offers almost all the needed features. People look for advantages such as lower interest rates, lower charges, lower annual fees, and higher rewards, apart from better service.
For starters, each of these businesses has a wide-spread network across the world.
Therefore, these cards are also acceptable in different parts of the world. Though most of the merchants that sell their products through the Internet accept payments by cards, there are a few who prefer only MasterCard, while others favor only Visa Card. Bankers and other offline businesses also show such bias. Therefore, which of the two cards would be better depends upon the product or service that is being paid for, and whether the merchant is amenable to payment from the particular card. Another factor is, of course, the bank. The rate of interest that the bank is likely to charge also affects the preference. If the difference is nominal, people are unlikely to favor the other card. However, if the amount involved is large, and the difference in interest or other fees is substantial, then the balance would tilt in favor of the other card. Some people prefer to carry more than one card. Therefore, they may even include card from companies like American Express. Many of these cards entitle the cardholder to incentives such as rewards, or cash back. These cash back rewards are offered through retailers. Owning multiple cards may help in making payments in different parts of the world, but it can also block money for a long period without any interest.