This article discusses the Differences Between Visa, Mastercard, Discover, and American Express. You will also get accurate knowledge of the four major credit card processing networks in the United States. These credit card processing networks are Visa, MasterCard, Discover, and American Express. They establish the guidelines for credit card processing. Also, they determine the fees for processing credit cards, and facilitate the credit card transactions. These Credit card processing networks align with different issuing banks to issue credit cards to borrowers. The banks and financial institutions charge borrowers for their transactions and collect payments for outstanding balances.
Differences Between Visa, Mastercard, Discover, and American Express ; Credit Card Issuing
Visa, Mastercard, Discover, and American Express have only facilitate credit card transactions. But American Express and Discover facilitate credit card transactions. They also double as banks that issue credit cards.
Those who have a Visa or Mastercard directly make payments to their credit card issuers. They do not pay to the processing network. Visa and Mastercard do not give credit cards. They only work with issuing banks that give credit cards. Bank of America, Capital One, and Chase are examples of credit card issuers.
Differences Between Visa, Mastercard, Discover, and American Express ; American Express and Discover
American Express and Discover act as both the processing network and the card issuer. They do not partner with bank or credit unions. Up to 2004, Visa and Mastercard blocked banks that issue their cards from issuing American Express and Discover cards. But American Express and Discover carried out a successful antitrust lawsuit against Visa and Mastercard. They started issuing cards through other banks. They also still issue credit cards to individuals at their own risk.
In the past, the American Express only offered charge cards. A charge card is a card that makes cardholders to pay their balance in full each month. Now, it has added circulating credit cards to its offers. This is for affluent cardholders and business credit card users.
Card Processing Fees
Completing a credit card transaction can be very hard. Many companies and numerous resources must contribute. However, Credit card processing networks established an interchange rate that merchants pay to accept credit cards. The merchant’s bank can charge an additional fee to do their own businesses.
The processing networks here charge different interchange fees. The charges are based on the type of business and the type of credit card. Discover’s interchange rate is a bit higher. And the rate for American Express credit cards is higher than other processing networks. Visa and Mastercard have closely related interchange rates.
Debit Transaction Processing
Some of the major processing networks also process debit card transactions. Debit cards function like credit cards. However, debit card transactions are funded from a consumer’s bank account, rather than a line of credit. Debit cardholders use the money they already have in their accounts to make purchases and transactions. The majority of debit card transactions in the U.S. are facilitated by Visa and Mastercard. The banks only partner with them.
Merchants worldwide accept Credit cards from these four processing networks. However, the American Express and Discover do not have many merchants who accept their cards. Outside the US, Discover is in use in 190 countries and territories. Visa is in use in more than 200 countries and territories. Mastercard is in use in more than 210 countries and territories worldwide . American Express is accepted in more than 140 countries and territories.
The Best Network
It is always better for cardholders to choose a credit card based on the credit card issuer. They also consider the features of the card . If most of your transactions are made in the United States, use any credit card from any of the four major processing networks. However, if you plan to travel internationally. Use a Visa or Mastercard, it is very ideal because it has more worldwide acceptance.