What are the main differences between the credit and debit card giants?
Every day in your business, you will see the familiar logos of Visa and MasterCard. You will no doubt have numerous logos emblazoned here and there to let your customers know they can spend their hard-earned credit with you.
For many customers, the choice of card they carry is determined by their preferred bank, rather than any conscious decision process.
The same is true for all of us.
Keep reading to find out how you can build customer relationships by understanding the benefit packages Visa and MasterCard provide.
Credit Cards as Brands
In the age of social media, we are all starting to understand the importance of branding. As a business owner, you will have spent time and money developing your brand. Visa and MasterCard are no different. In fact, both of these key players in the credit and debit card industry are entirely brand focused. Here is a little known fact. Neither Visa nor MasterCard actually produces any plastic cards at all. That job is down to the financial organisations that choose to use them. Visa and MasterCard rent the use of their brands, and the infrastructures they have built to issuing banks.
So if Visa and MasterCard simply license their respective logos to banks and financial institutions, does it make any difference to the cardholder when it comes to which one they use?
The simple answer is yes. The banks and financial institutions (issuing banks) that use Visa as a brand set the majority of the conditions surrounding the card. It is the issuing bank's role to set interest rates, terms and conditions and the majority of the rewards on offer. This could be seen as an initial level of benefits that a cardholder can enjoy. The issuing banks will compete with each other to offer the best deals.
However, there is another layer of benefits provided by Visa and MasterCard themselves. Because the issuing banks all have to pay a percentage to use the brand name, Visa and MasterCard are competing for the issuing banks. To help the issuing banks attract their customers, Visa and MasterCard load their credit and debit card services with an additional layer of benefits.These additional benefits have a two-fold effect. If Visa comes up with an additional benefit which is attractive to a cardholder, (Free travel insurance, for example), the holder may consider adopting a new card with a new issuing bank. This is becoming more relevant with easy access to services like Revolut and Monzo, who also issue branded cards.
An insight into Visa and their benefits?
Visa does not see itself as a credit or debit card provider. Visa, (and MasterCard for that matter) have positioned themselves as tech companies, offering a payment infrastructure to merchants like yourself.
Let's have a close look at how each brand have developed benefits for its users.
Visa benefits:
Traditional:
This level provides vehicle rental CDW (Collision damage waiver), zero fraud liability protection. Emergency card replacement and roadside assistance.
Signature benefits:
The Signature benefits package includes all of the features of the Traditional. To add to the appeal of their services, Visa has added an extended warranty protection policy and worldwide travel and emergency assistance to Signature customers.
Infinite Benefits:
As a top layer benefit package, issuing banks can advertise all of the Traditional and Signature features with additional premium benefits such as; returns protection, purchase protection, travel accident insurance, trip cancellation, interruption insurance, and lost luggage reimbursement.
Did you know that these benefits existed? Now let’s look at Visas competition.
MasterCard Benefits:
Not to be left behind, MasterCard also offers a comprehensive range of benefits for the issuing banks to tout.
MasterCard Standard Benefits
The entry-level benefits package for MasterCard customers includes; emergency card replacement, identify theft protection and zero fraud liability.
MasterCard World Benefits
As with Visa, each level of benefit includes the features in the previous level. In addition to the Standard benefits, World benefits include; cell phone insurance, access to trip planning, travel & lifestyle Services, a concierge package, plus discounts and promotions with selected retailers.
MasterCard World Elite Benefits
MasterCard top off their benefits portfolio with the addition of exclusive retail deals, preferential access to key events and experiences which include cinema and golf. At the tie of writing MasterCard are sponsors of major PGA Golf Tournaments and so it easy to see why these elite packages may speak to niche demographics.
Why should I Care?
Apart from the obvious reason that your wallet may contain benefits you were not personally aware of, there is a golden opportunity here for any retailer, e-commerce store, service provider or charity that accepts Visa or MasterCard.
Think about it. As the world becomes more polarised, and business becomes harder to win, relationships with your customers are harder to maintain. This is particularity relevant to the High Street, where online competition can dilute the connection you have with the cardholder walking through the door.
Maybe spending some time understanding the Visa and MasterCard benefit packages can give your staff that all-important edge and personal touch. A customer loves to be in the presence of an expert. That dynamic of the customer to the merchant is what retail is all about.
Why not have your staff go through and see how each Visa or MasterCard benefit relates to what you sell, and the people you sell to? For example, if you are a sports goods retailer and a customer enters the store looking for a new set of golf clubs, the question, "Do you use MasterCard"? Opens a dialogue about the benefits of the Elite package.
Remember the old adage; people buy from people they like. It is the little things like sharing beneficial knowledge with a customer that can help you become less of a retailer and more of a friend.