FinTech Developments: Visa vs. MasterCard

By Michelle Chin

Fintech Developments: Visa versus MasterCard

Visa and MasterCard are common logos we see in our daily lives. While many know that there is a logo representing one of these companies on the lower right corner of their debit or credit cards, how many people actually know what they do, who they are and what are the differences between them?

Visa and MasterCard are payments processing networks and they charge fees to the merchants in exchange for facilitating payment transactions.

Neither Visa nor Mastercard issue their own credit cards, instead, the cards themselves are issued by individual banks. Visa and MasterCard run a third-party payment processing network, serving as an intermediary  between consumers and merchants. The companies make money by charging fees to merchants in exchange for facilitating payment transactions. Therefore, since both networks do not offer their own credit cards, they are not the ones directly in charged of reward programs, interest rates, card fees or customer service.

While both firms have existed in the finance space for several decades and are known for being ‘dinosaurs’ in this sector due to their sluggish adoption in technology in the past, they have been pouring immense efforts in innovation recently, especially in the field of fintech.

Here are some similarities and differences of Visa and MasterCard in terms of their developments in the fintech industry.


Fintech Focus

Visa recently opened a technology development centre in Bangalore, India that accelerates their digital commerce efforts globally. In March this year, Visa announced that they are opening an innovation centre in Dubai in the UAE. This initiate is to help Dubai achieve its Smart City objectives, while also offering a platform for payments innovation across Central and Eastern Europe, Middle East and Africa (CEMEA).

MasterCard, on the other hand, have been paving their way in Israel with a mission to uncover top fintech firms there through their annual DLD Tel Aviv Innovation Conference 2015. Late last year, MasterCard launched its NYC Technology Hub, which builds on their existing hubs in Dublin, Singapore and St. Louis. This hub will house MasterCard’s teams behind the MasterPass, the Digital Enablement System and Start Path, their fintech accelerator.


Incubators and Accelerators

Besides, MasterCard teamed up with Silicon Valley Bank to offer Commerce.Innovated, a 4-month virtual commerce-focused startup incubator in the United States. Since its launch in 2014, Commerce.Innovated has assisted 10 startups.

Just last month, MasterCard announced the launch of Start Path Global, a 6-month fintech incubator with a focus on emerging markets. This is an extension of their existing Start Path program, which has been running for 18 months, which involved over 40 commerce-related startups and an array of partners from leading companies in banking, retail and technology.

Visa, on the other hand, launched the Visa Europe Collab, dubbed as an international innovation hub which offers a 100-day program, similar to how accelerators or incubators function. They work with a network of partners in the digital and fintech ecosystem and offer tools, networks and insights to entrepreneurs to nurture talents and develop potential.



Due to its volatility and uncertainty, most financial giants are still sceptical about the blockchain technology and cryptocurrencies.

While MasterCard maintains their scepticism about Bitcoin and digital currencies as a whole, Visa has recently announced that they are running research on blockchain in their labs in the US and Singapore, which will be subsequently joined by their team in India. They are slowly witnessing how blockchain technology could potentially revolutionise the financial services industry and have decided to take a leap in considering the possibility to integrating it into their own networks in the future.

Just a month ago, Visa backed a Bitcoin Blockchain startup, Chain, in line with their efforts in this sector. This effort was joined with other financial giants such as Nasdaq, Citi Ventures and Capital One. Chain uses the blockchain technology to help develop ways to trade and transfer financial assets alongside banks and other institutions.


Mobile Payments System

In 2013, MasterCard launched Masterpass, a digital payments service. The digital wallet was recently introduced in Asia and now reports 40 million users in the Asia-Pacific region. After their Masterpass launch, MasterCard partnered with Citibank India to launch Citi Masterpass, India’s first global e-wallet.

This summer, Visa launched mVisa, a new mobile payments service. mVisa users will be able to link their Visa cards or accounts to their mobile phones through an app and use it to pay for purchases in stores and online. Other than that, it can be used to pay bills and transfer funds to other Visa account holders.

While both MasterCard and Visa have leaped into the mobile payments space, they are still battling with big tech giants such as Apple, Google and Samsung. These tech giants have come to realisation about the advantages of these partnerships, however, Visa and MasterCard may not receive large benefits as their main focus is still on card transactions and they have also launched their own mobile payments systems. However, if the future of transactions lie in mobile, this may work out well for Visa and MasterCard.

In the same space, Visa and MasterCard, beside their global competitors AMEX and Discover, who they are miles ahead of, they face strong regional competition from China’s UnionPay and India’s RuPay. In any case, UnionPay’s Q1 performance has already surpassed Visa at $1.9 trillion in transaction value. Nonetheless, from September 2015 onwards, Visa and MasterCard can now enter the payment clearing market in China.
If they play their cards well, they may just be able to achieve even greater heights in their own right.

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