What’s the difference between Mastercard and Amex?

Wondering whether to get a Mastercard or an Amex credit card? Canstar explains the differences between the two major payment networks.

Mastercard and Amex have some key differences. Mastercard is a payment processing system only, so it does not issue any cards directly to consumers. Instead, it allows financial institutions to brand their cards as ‘Mastercard’ and use the Mastercard payment processing system.

An ‘Amex’ card is issued by American Express. Amex is also a payment system, but American Express issues its own Amex cards directly to the consumer, finances Amex payments and processes the transfers.

Where are Mastercard or Amex cards accepted?

Mastercard is widely accepted in more than 210 countries and territories and in more than 150 currencies.

While American Express does not publish a list of worldwide locations for Amex cards, it does say that it is available at over 135,000 retailers across Australia. Amex cards are generally thought to be less widely accepted than Mastercard.

In Australia, it is usually cheaper for merchants to accept a Mastercard payment compared to an Amex payment.

According to data from the Reserve Bank, the average merchant fee is 0.9% for Visa and Mastercard credit card transactions and 0.5% for Visa and Mastercard debit card transactions.

Amex fees are more expensive, with an average merchant fee of around 1.3% as of September 2023.

Some businesses charge card surcharges to cover the cost of accepting card payments. The Australian Competition and Consumer Commission (ACCC) has banned businesses from charging excessive payment surcharges for some payment types, including Mastercard credit, debit and prepaid cards.

But there are some payment types not covered by the ban, including Amex cards issued directly by American Express. That means the ACCC cannot take action if a business charges a customer more than what it costs them to process the payment.

Does Mastercard or American Express have a better rewards program?

The rewards you receive with a Mastercard credit card will depend on the financial institution you bank with, as well as the specific card.

Mastercard categorises its credit cards into Standard, Platinum, World and World Elite, and each offer different benefits. Depending on your card type and issuer, you may be able to access concierge services, shopping insurances, travel assistance and other special offers.

Cardholders can also access Mastercard’s Priceless Specials on travel, sports, food, shopping, arts and culture, and entertainment.

The rewards you receive with an Amex card will vary depending on the card type. American Express offers Amex Rewards credit cards that allow you earn Membership Rewards points on purchases, which can be redeemed on travel and holidays, shopping, experiences, gift cards and more.

It also offers Qantas credit cards, which allow you to earn Qantas Points on purchases. If you have a more premium card, you may also be able to access concierge services, shopping insurances, travel insurance and other services, benefits and special offers.

How did Mastercard and American Express start out?

Mastercard was founded in 1966 when a group of banks formed the Interbank Card Association (ICA). It then changed its name to Master Charge and later Mastercard. Mastercard credit cards are now available in Australia through a large number of financial institutions, including some of the big banks.

American Express originally began as a freight forwarding company in 1850. In the late 19th century and early 20th century, it introduced financial products and travel services. It entered the Australian market in 1954 and launched the first Amex card in Australia in 1974.

Should you choose Mastercard or Amex?

Whether you should choose Mastercard or Amex will depend on your personal circumstances and how you intend to use your card. Mastercard is more widely accepted, so it may be ideal if you are choosing a credit card for convenience.

Looking at rewards, American Express does offer its own rewards program where you can earn Membership Rewards points, as well as offering cards that allow you to earn Qantas Frequent Flyer points.

The rewards you can get with a Mastercard credit card will largely depend on the provider and card type.

Make sure you carefully consider the specific card in question, rather than just the payment network, and compare factors like the interest rate, fees, features and rewards on offer.

Consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the PDS and TMD.

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