What’s The Difference Between Visa And AMEX?

Do you need a Visa or an AMEX card for that? Canstar examines the Visa vs AMEX pros and cons.

Visa and AMEX (American Express) might both be seen as credit card providers, but in fact they are quite different. Here’s how.

What’s the difference between Visa and AMEX?

Visa and AMEX actually do different things. Visa is a payment processing system only; it does not issue any cards directly to the consumer, but allows financial institutions to brand their cards as “Visa” and use these cards on the Visa payment processing system. They make money from the interchange fees they charge banks to use their system.

Meanwhile, AMEX is also a payment system, but American Express also issues cards directly to the consumer, finance payments, and process the transfers. They make most of their money from interest charges and fees.

For more of the difference between Visa and AMEX, including rewards programs and acceptance, read on…

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How many Visa and AMEX cards are there?

Visa as a company is simply huge. They have a 16% market share worldwide (Nilson Report, 2016) and there are 2.5 billion Visa-branded cards floating around the world in more than 200 countries as of September 2015.

In contrast, AMEX has a much smaller market share worldwide, and they have 117 million cards actively in use in total.

You can view a snapshot of the cards currently available from both Visa and Amex in the tables below, with links direct to the providers’ website. Please note that these tables have been generated based on an average monthly spend of $2,000 and sorted by purchase rate (lowest first).

Where are Visa vs AMEX cards accepted?

AMEX is accepted at tens of thousands of merchants across Australia and although they don’t publish their worldwide figures, they are reported to be accepted at around 15 million merchants worldwide. They also do not publish how many ATMs they have, although they have an online ATM locator.

Visa is estimated to be accepted at about twice that many merchants – close to 30 million locations worldwide. Visa has more than 2 million ATMs around the world.

Is Visa or American Express better for rewards programs?

Visa offers Platinum cardholders concierge services, emergency assistance services, discounts on dining, and exclusive tickets to major concerts and sporting events. As for what’s available for Visa cardholders travelling overseas, Visa cards perform reasonably, with discounted airfares and package tour deals, good exchange rates on offer, direct conversion from local currencies into AUD (rather than MasterCard’s more complex local currency – USD – AUD conversion). (Find out how Visa rewards compare to MasterCard rewards here.)

AMEX cardholders also receive concierge services, fine dining deals, and exclusive tickets to concerts and sporting events. The points earn rate is generous, with cards earning 3 points per $1 spent. The American Express offerings from the big four banks came out on top in CANSTAR’s 2016 ratings of credit card rewards, thanks to their high earn rates. In particular, the major banks in Australia have partnered with AMEX to offer higher earn rates for frequent flyer reward points with Qantas and Virgin Velocity. (Find out how AMEX rewards compare to Diners Club rewards here.)

Of course, credit card rewards are constantly changing as providers compete with each other – so it’s worth following our credit card rewards star ratings to keep an eye on what’s on offer:

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Credit card surcharges – Visa vs AMEX

How do Visa vs AMEX compare in terms of those annoying credit card surcharges? Although surcharges should be reducing under the new laws, Visa and AMEX both charge interchange fees to the banks that use their payment systems, so surcharges for both of these cards do still exist. And cards issued directly by AMEX will not be reducing their surcharges, because they are a closed system that the RBA does not regulate.

However, AMEX has largely overcome having such high surcharges by having a MasterCard or Visa companion card in addition to the higher-earning American Express card. This is useful for more than just avoiding the surcharge – as we mentioned above, AMEX is accepted at about half as many merchants as Visa. But it is worth remembering that these companion cards do not have the same high earn rates for rewards points.

How did the Visa vs AMEX race begin?

Visa was created shortly afterwards in 1958, as the Americard by Bank of America, the first credit card available for middle-class consumers, small businesses, and medium-sized merchants in the USA. It was renamed to “Visa” in 1976 because the company had been expanding internationally, and “Visa” is the only word that sounds the same in most languages around the world. VisaNet became the world’s first electronic system for processing card payments, and today it remains the world’s largest electronic payments network. Innovations from Visa include global Innovation Centers, tokenisation, mobile location confirmation for travellers, connected cars, DonorsChoose.org, and security for the Internet of Things.

In terms of the Big 4 Australian banks, NAB has signed a 10 year exclusive agreement to issue only Visa cards, and ANZ and Westpac both issue Visa cards along with MasterCard products. Meanwhile, the Commonwealth Bank is the only one of the Big 4 not to issue any Visa cards, as they have an agreement with MasterCard.

Source: Visa Australia

American Express was founded even earlier, in 1850, as an express mail business. In 1882, American Express expanded by launching a money order business to compete with the US Post Office. Moving towards what would become their crowning achievement as the world’s largest issuer of credit cards and charge cards, in 1891 they launched the American Express Traveler’s Cheque in four denominations ($10, $20, $50, and $100). In 1958, following the success of Diners Club, American Express created its own charge card, issuing 250,000 cards even before the launch date. Innovations from American Express include the ‘Shop Small’ promotion for small businesses every year in May, September, and November, encouraging Australian communities to support their local small businesses.

Source: American Express Australia

Should you choose Visa or AMEX?

Hopefully the above pros and cons of Visa vs AMEX have helped you along in your journey of trying to decide which provider’s card could work best in your situation. For the vast majority of consumers, the right card depends on how you use your card. Visa is accepted in more places, so it would be ideal for those who choose a credit card for convenience; but those who chase rewards points may need to consider the pros and cons of the Visa vs AMEX rewards programs.

Of course, with AMEX offering Visa as a companion card, you may not have to choose at all! You may be able to have both cards in your wallet with one shared credit limit, so that if a merchant doesn’t accept one, you have the other as a back-up.

Don’t forget the other things you need to check when choosing a credit card – the interest rate and fees on the card, the balance transfer deals available, or the rewards program on offer. You might even consider whether you need a credit card at all (check the pros and cons here), since the majority of Australians actually prefer using debit cards.

If you need a credit card, use CANSTAR’s credit card selector to compare more than 210 credit cards using our expert star ratings. You can filter your search to choose a credit card based on interest rates, card features, rewards programs, and value for money.

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Canstar provides an information service; it is not a credit provider, and in giving you information about credit products Canstar is not making any suggestion or recommendation to you about a particular credit product. See Canstar’s Financial Services and Credit Guide for more information.

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