MasterCard is a US-based financial services and payment card provider. These include credit cards, debit cards and credit cards. In Central Europe, the Maestro card is also known, also called EC card, which is also licensed by MasterCard and issued by almost all banks. This is not a credit card, but a bank card that only debits the current account. Worldwide, MasterCard is the second most popular credit card (33%), followed by Visa (40%). In Germany the situation is different. MasterCard is the most popular in this country (50%), relegating Visa to second place (35%). In this article we describe the advantages of MasterCard, which products and technical options are offered and what credit card payment means for the subscription economy.
What is the difference between MasterCard and Visa?
Basically, MasterCard is not a card issuer; in Germany, this is always the banks or savings banks. Accordingly, the conditions can vary. Instead, the providers issue licenses’ to the banks. In the way they work, both providers are very similar. The only difference is in the conditions, which are set by the respective credit institutions. The credit limit is also set by the bank and not by the providers. However, minors or people with a poor credit rating can also enjoy a credit card thanks to a debit or prepaid card. The company currently offers seven different cash cards:
- MasterCard Standard: The most affordable and widely used MasterCard
- MasterCard Gold: Works like the standard card, but with additional benefits like travel insurance, etc.
- MasterCard Platinum: Works like the standard card, only with more privileged additional benefits
- WorldElite MasterCard: Provides more convenience, additional benefits and support services
- MasterCard Prepaid: Works like a top-up or gift card
- Debit MasterCard: Works like a standard credit card, but with better cost control
- Maestro card: Corresponds to the classic EC card, where only as much money can be withdrawn and paid as is available on the current account.
What advantages does Mastercard offer its customers?
A credit card offers a number of advantages – both for customers and for businesses. First and foremost is security. Because the risk of default is always assumed by the bank, not the consumer or the company. The other advantages:
- Worldwide acceptance
- Low costs
- No high credit rating required
- SecureCode makes online shopping even more secure
- Support services in case of theft or loss
- Attractive additional services and insurance
- Possibility to pay contactless or with Apple Pay (PayPass)
What does the Mastercard mean for the Subscription Economy?
Payment by credit card is becoming increasingly important, especially in the Subscription Economy. It is one of the most important and significant means of payment and continues to have high growth potential, especially in Germany. The initial skepticism towards credit cards has almost disappeared, especially in the target group of subscription customers.
On the contrary: offering the possibility to pay by credit card creates trust towards the consumer, because the logo is like a seal of approval for secure shopping. However, higher data protection requirements mean more effort for the company when integrating this payment method. However, thanks to innovative payment service providers such as Klarna, Paypal or Payone, these requirements can be easily met, making integration much easier today than it was just a few years ago.
Conclusion: Mastercard is one of the standard payment methods
The fact that the card will continue to rise in favour among consumers is also shown by current studies, according to which the Bundesbank reports that the number of credit cards issued in Germany has risen by about 60% to 28.7 million in the last ten years. The number of credit card payments has even almost doubled to over 700 million transactions.
The trend continues to rise. For brick-and-mortar retailers in particular, contactless payment is creating ever better opportunities to offer customers an attractive shopping experience. And experience shows that a higher acceptance of the brand can also have an effect on the overall purchasing behaviour. So there is still a lot of potential in paying by credit card.