What's the difference? Our guide tells you everything you need to know about the major payment systems.
It's funny the sort of brand affiliations we develop. Personally, I've always preferred Visa, but I couldn't tell you why. I didn't even have a Visa card until about three months ago (I've had a MasterCard for about five years now), so my preference certainly wasn't based upon personal experiences. Maybe I just like their logo better (although I am a fan of MasterCard's corporate logo - check it out here), or maybe I'm a victim of subliminal marketing. Whatever the reason, like a lot people, I hold a preference for a particular credit card payment system. But does the payment system make a difference? Should it be a serious consideration in the selection of a card?
What's a payment system?
Visa, MasterCard, American Express, Diners Club and Discover are all payment systems. Essentially, these companies operate the computers which process your payments. If you use your card in Timbuktu, they inform your bank in Tawoomba (and receive a small fee for doing so).
The confusion arises because a lot of these companies also offer their own credit cards. For example, American Express offers a range of cards in the same way a major bank does. It might help to think of the payment system companies as the wholesalers and the banks as the retailers. Like some wholesalers (Telstra for example), these payment system companies can also act as retailers.
Is it important?
For most consumers, the answer is no. The critical features of your credit card (interest rate, fees, interest free period, rewards etc) are set by the bank and not by the payment system.
The payment system determines where your card will be accepted, some security features and additional benefits (such as concierge services, exclusive offers on dining, entertainment, concerts etc).
Acceptance
Most payment systems are widely accepted in over one hundred and fifty counties, however there are some exceptions. Diners Club cards are usually less accepted and Discover cards are often unheard of outside of the US. If you're travelling to non-Western countries, you might want to do some research on which major payment systems are accepted there. Alternatively, if you already have a Visa you could get a cheap no-frills MasterCard and vice-versa.
