Which Credit Card Network should you choose?Visa vs MasterCard vs American Express vs Diners Club

Generally, when we apply for credit cards, we follow the advice of financial advisors. As per experts’ advice, we need to analyse our financial requirements and check our credit profile before availing a card. Rarely do we wonder about how credit card payments actually take place.

Well, credit card networks are what make it possible. Many a time, cardholders are unable to differentiate between credit card networks and credit card issuers. Through this blog, we will help you get a clearer idea along with other details. 

What Are Credit Card Networks? 

First, let us quickly understand credit card networks. The companies that act as a bridge and facilitate a communication system between credit card issuers and merchants / retail shops that accept your credit cards to complete a credit card transaction successfully are described as credit card networks. 

While some credit card networks issue credit cards as well, not every credit card network falls under the category of credit issuers. For example, Visa and MasterCard are credit card networks. But, American Express and Diners Club function both as credit card issuers and credit card networks. 

Differences between Credit Card Networks and Credit Card Issuers 

The table below will help us understand the differences between credit card networks and credit card issuers, in more detail: 

Brief Overview of Visa, MasterCard, American Express and Diners Club 

The most common credit card networks in India are Visa, MasterCard, American Express and Diners Club: Let us look at their details: 

1. Visa

Visa is the most important card card network globally offering people both premium rewards and traditional benefits. With a Visa credit card or debit card in hand, you can make financial transactions and withdraw cash from around 2 million ATMs. 

Please note that Visa does not issue credit or debit cards on its own. Instead, it facilitates electronic fund transfers through Visa-branded payment products. Visa offers its services for 5 variants of credit and debit cards, namely Classic, Gold, Platinum, Signature and Infinite cards, and prepaid cards.

2. MasterCard

MasterCard, a financial services company, is another popular credit card network which seeks to connect credit card issuers and customers using MasterCard-branded payment products. 

Some of its credit card variants include Standard MasterCard, World Elite MasterCard and World MasterCard. Debit card variants include Standard Debit MasterCard and Enhanced Debit MasterCard. The network also offers variants of prepaid cards. 

3. American Express

American Express is a publicly traded financial services company based in the United States which offers credit cards laden with various benefits. These cards are famously referred to as AmEx cards and are issued to individuals, businesses and corporate consumers all across the world. 

Exciting benefits provided by AmEx credit cards include airport lounge access. Some of the famous American Express retail credit cards are American Express Gold Credit Card and American Express Platinum Credit Card.

4. Diners Club

Diners Club is a credit card payment network owned by Discover Financial Services. Incidentally, this company was the first in the world to issue credit cards. It is an ideal credit card for people who have to make international trips quite frequently. It is famous for providing exclusive benefits such as unlimited lounge access and reward points. 

Diners Club has partnered with HDFC Bank in India and some of its popular credit cards include HDFC Diners Club Black, HDFC Diners Club Privilege, HDFC Diners Club Miles, etc. 

The following table will help you clearly understand the differences between these credit cards: 

Important Points Regarding Visa, MasterCard, American Express and Diners Club Cards 

Let us look at a few important points regarding the credit and debit cards of the above brands:

• Financial institutions throughout the world pay Visa and MasterCard for their extensive network coverage on an international level. This has been made possible with thousands of merchant terminals and ATMs all over the world.
• On the other hand, American Express and Diners Club credit cards are responsible for issuing cards and processing the payments on their credit card network system. You might have observed that American Express is quite good at dispute handling which saves their cardholders from any issues they have with merchants.
• American Express credit cards and Diners Club credit cards charge high transaction fees from the merchants because it is their most important source of income. Nowadays, they have even partnered with financial institutions to issue co-branded credit cards. An important reason behind this step is to increase the market share of their credit cards. 
• Analysts have observed that no one can compete with Visa and MasterCard when it comes to acceptance rates. These credit card networks work even in the remotest areas of the world. 
• American Express and Diners Club credit cards are mostly accepted in major urban areas and metro cities. 

Final Words

Although you might hold American Express and Diners Club credit cards, it is a good idea to possess Visa and MasterCard as backup options. This is primarily because the former two credit cards might not be accepted in the remotest areas. Go through the details provided above about Visa, MasterCard, Diners Club and American Express and carefully consider which brands offer you the best value for your transactions.

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