Two leading credit card companies available today are Visa and Diners Club, but don’t mistake the two as being the same.
What’s the difference between Visa and Diners Club?
Visa and Diners Club are quite different, starting with their business approach. 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, Diners Club is also a payment system, but they also issue cards directly to the consumer, finance payments, and process the transfers. They make most of their money from interest charges and fees.
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Now for some more differences in detail…
How many Visa and Diners Club cards are there?
There’s no denying Visa is huge, with a 16% market share worldwide (Nilson Report, 2016). There are 2.5 billion Visa-branded cards floating around the world in more than 200 countries as of September 2015.
In sharp contrast, Diners Club has a less than 1% market share worldwide. They have more than 70 million cardholders in 185 countries around the world, much fewer than Visa’s 2.5 billion.
Where are Visa vs Diners Club cards accepted?
Diners Club has partnered with MasterCard for wider universal acceptance. It tells us that 38 million MasterCard locations around the world accept Diners Club cards. Diners Club has over 800,000 ATMs in more than 185 countries as of 2015.
Visa is estimated to be accepted at close to 30 million locations worldwide. Visa has more than 2 million ATMs around the world.
Is Visa or Diners Club 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.)
Diners Club members also have concierge tickets, fine dining deals, and exclusive tickets to concerts and sporting events. Cardholders earn 3 points per $1 spent. When travelling overseas, Diners Club members have access to more than 700 airport lounges around the world. Diners Club Australia has a credit card that appears in our top 10 list for the highest earn rates for Virgin Velocity rewards. However, you should note that Diners Club members pay a higher credit card surcharge, with many Australian retailers charging up to 3% – although that may change under Australia’s new credit card surcharge laws. (Find out how Diners Club rewards compared with American Express (AMEX) 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:
How did the Visa vs Diners Club race begin?
Diners Club created the world’s first charge card in 1950, when businessman and co-founder Frank McNamara forgot his wallet while eating out in New York. To avoid such embarrassing occasions in the future, he created the Diners Club Card, which was accepted at 28 restaurants and 2 hotels. The club grew to 10,000 members in its first year alone. Later, Diners Club would begin issuing credit cards as well, which could carry a balance and therefore did not have to be repaid in full every month, unlike charge cards.
Source: Diners Club International
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
Should you choose Visa or Diners Club?
Back to the main question – which provider is best, Visa or Diners Club? For the vast majority, it will depend 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.
It’s not unusual to see some people with several credit cards in their wallets, one a Visa and the other a Diners Club or AMEX card (see the difference between these two), and a MasterCard for good measure. The thinking behind this is that if they were in the unusual position of finding a location that accepts one card but not another, they would still have a payment option. Some people also like to take advantage of exclusive offers from both card types.
But you don’t just get a credit card for the convenience – you also need to check the interest rate and fees on the card, the balance transfer deals available, or the rewards program on offer. And you may even be wondering whether you need a credit card at all (check the pros and cons here), since the majority of Australians actually prefer debit cards.
At the end of the day, much more depends on the bank that gave you the card, rather than on the type of card it is. Use CANSTAR’s credit card selector to compare more than 210 credit cards using our expert star ratings to help you choose a credit card based on interest rates, card features, rewards programs, and value for money.