PayPal vs MasterCard, Visa card and Credit cards:
In this article, we will compare and differentiate MasterCard, Visa, and PayPal. We will first provide a general definition of Visa card, MasterCard, and PayPal, followed by a discussion of their differences with PayPal.
What is a visa card?
An American multinational company that operates worldwide in the field of financial services. The cards issued by this company replace cash and cooperate with international banks and companies. The Central Bank of America initially issued a visa card under the brand name Bank AmeriCard, which was later renamed to Visa Card and issued by Visa Company. In fact, with this card, you can make transactions anywhere in the world from all ATMs, card readers, and POS devices. Currently, Visa card has been able to connect more than two hundred financial institutions worldwide through electronic banking.
If we want to introduce the Visa card more precisely, we can use this example: there are different banks in the country, and one of their services is issuing debit cards. Most of these cards are members of the Shatab network. This means that you can use the ATMs of other banks with your own bank credit card or transfer money to other banks’ credit cards using the same card. The Shatab network is a national network that provides this possibility inside the country for Shatab member card holders. A visa card also has a function similar to domestic credit cards, with the difference that it carries out activities at the international level and establishes a connection between different banks worldwide.
The services provided by Visa card include three parts:
Debit cards: To use this card, the amount of money in the account must be equal to the purchase or withdrawal.
They are a type of card connected to a bank account, and the cardholder can make purchases even higher than the card’s balance.
And prepaid cards (Pre-Paid Card): It has the same function as a debit card, and the bank account is not connected to the prepaid card. There are two types of rechargeable and non-rechargeable, which operate all over the world.
Some examples of Visa cards:
Visa Electron: suitable for people who want to perform cheap services such as paying in stores or receiving money from an ATM.
Visa Classic Card:
It is used for extensive services with low fees, which can be used for face-to-face and face-to-face payments.
Visa gold card: In addition to having the features of the previous cards, it provides facilities such as offline shopping and car rental.
What is MasterCard?
This company, like the Visa Card Company, is an American multinational company that has a similar function to the Visa Card and operates by making international payments to banks around the world and issuing various types of credit and debit cards. The Master Card company first operated under the brand name Master Charge, and several banks issued cards in California, USA. In 1979, the name of Master Charge was officially changed to Master Card. Now more than 210 countries in the world can use MasterCard services.
Using MasterCard, you can use services such as:
Receive cash up to $3,000 daily from ATMs that have the MasterCard logo;
Purchase using common currencies of the world;
Made purchases from international sites and POS devices without receiving fees, etc.
In 2016, China allowed international companies such as MasterCard and Visa to operate in the country due to the pressure it received from the World Trade Organization.
How Visa and MasterCard work:
Master Card and Visa Card operate in the financial services field for banks, financial institutions, department stores, etc., both at the level of a country and the international level. They are the main competitors and provide almost the same services. They give. For example, money transfers from the country’s foreign exchange branches, cashing money from ATMs, shopping from international stores, etc., are among the activities of these two companies. For example, stores that accept the payment process from MasterCard usually also accept Visa cards. These two companies have a lot of security; for example, if a personal Master or Visa card is stolen, the money cannot be withdrawn from the card because when each card is issued, a code is also given for it, which is specific to the same card. The card transaction speed is also high.
Since the functions of the two cards are similar, to receive a Visa card or MasterCard, you should pay attention to what distinctive features the bank issuing the card has in mind for you. Such as registration bonuses, prizes, lottery, etc. and based on that, he decided which card to get.
MasterCard has three levels basic, global and global premium, each of which provides specific services.
It should not be said that MasterCard has a very important service called price protection so that if a product is purchased and the price of the product decreases within 60 days after the purchase, MasterCard will transfer the amount of the price reduction to the card that bought it. It will be returned, so the card owner does not suffer any loss. Visa Card Company does not provide this possibility, but some issuing banks may support price protection.
Keep in mind that in Iran, due to the imposition of sanctions by the United States, the mentioned financial networks do not operate, and this issue brings many problems for financial exchanges, especially at the international level; among these problems can be payments in foreign trips He mentioned about the country, international purchases, global transactions, etc.
What is PayPal?
PayPal is considered a financial intermediary that performs financial processes easily using email without needing credit card or bank account information. Remember that you need a PayPal account, which you can easily create.
We gave a general definition of Visa/Mastercards and PayPal, and then we will examine their differences with PayPal:
Although these cards are considered financial companies, their activities are different from financial companies and do not accept banks’ risk. For example, they do not pay loans.
On the other hand, PayPal is an alternative to traditional banks, while cards are responsible for processing financial transactions.
Getting a credit card is more traditional than creating a PayPal account because the card can be issued along with opening an account while creating a PayPal account online. It should be noted that PayPal is a more modern system, and to use it, you need to be familiar with the Internet and work with the PayPal website.
It is much easier to receive the PayPal port than the card port; that’s why many stores use the PayPal port for payment. Some institutions and organizations, such as embassies, use MasterCard or Visa cards to control the flow of their financial information to keep their information private from PayPal.
Another important difference between PayPal and Visa/Mastercard is that PayPal has a service called Send money, by which money can be transferred from one PayPal account to another. PayPal to PayPal) while in MasterCard/Visa card, money transfer is possible only to the bank account on which the card was issued.
Card companies are looking to increase the number of transactions and generate revenue, but PayPal is looking to increase user accounts and the number of financial transactions per user. It should be noted that in 2016, each PayPal user used their account 31 times on average, and in recent years, the number of them has increased by 10% to more than 200 million people.
PayPal established a partnership with MasterCard and Visa card companies to encourage users. Also, in 2016, Visa Card Company cooperated with PayPal so that PayPal customers could also complete the payment process in physical stores. Also, to create mutual benefits, Visa card customers pay fewer fees when using PayPal services.
PayPal does not pay dividends to its users, while MasterCard pays 78% dividends to shareholders. And this is an advantage for MasterCard. It should also be noted that PayPal assumes the credit payment risk.