Mastercard or Visa? Which of these 2 stocks appears more attractive?

Should you invest in Mastercard or Visa? It is a difficult question for investors to answer. These payment giants hold a virtual monopoly over the global payments system – American Express is a decent sized player, but is still no match for Mastercard (NYSE:MA) and Visa (NYSE:V).

The companies, headquartered in Purchase (in New York State, an hours drive north of downtown Manhattan) and San Francisco respectively, have their logos on the majority of the world’s debit and credit cards. They have some ancillary services such as cross-border transactions and risk-management solutions, but cards remain their core businesses.

It is important to note that the companies do not issue them directly to their partners but through member financial institutions. Their names and branding may appear to be their only difference, but we thought we’d take a deep dive on them to see if this really is the case.

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Operating model

The companies have slightly different models. Visa charges service fees to the issuer based on card volume. But Mastercard negotiates and calculates service fees as a percentage of global dollar volume. Both offer 3 card levels and this determines the level of service that consumers get, because they get the cost passed on in the form of credit card fees.

The card issuer sets the card’s terms and conditions, including fees, rewards and other features. The issuing bank is responsible for underwriting, interest rate structuring, and the full development of rewards programs. All transactions are processed at secure data centres.

How are they going? Pretty good at first glance

Both companies are sitting on 2000% gains since their mid-2000s IPOs. Considering more recent times, Mastercard is up just under 25% in a year, while Visa is slightly ahead with a 29% gain as at August 8, 2025.

Nonetheless, Visa remains valued at US$140bn more and at 32x P/E for CY25 while Mastercard is just under 38x. Analysts covering the companies are more confident in Visa, with a mean 12-month target share price 18% above the current price, while Mastercard is 14%.

In the most recent financial years, there were 234 billion transactions using Visa’s network equating to US$15.7tn and deriving nearly US$36bn in net revenue and ~$20bn profit. Mastercard made 159.4bn transactions equating to $9.8tn, leading to $28.2bn revenue and a $12.9bn profit – up 12% and 15% respectively.

Both companies actually trail China’s UnionPay by transaction volume although, UnionPay in a unique position because it is the only interbank network in China that links all the ATMs – but that’s for another article. American Express had US$66bn in revenue and a $10bn profit but $213bn in processed volume.

But headwinds are there

Neither company is completely safe, which is why they are responding to competitive threats. It remains to be seen if they will be enough. What threats? We see BNPL as one. To this end, Mastercard offers “Mastercard Installments,” integrated via APIs into bank—and merchant systems—boosting flexibility and adoption. Visa provides BNPL through “Visa Installment Solutions” and virtual credentials compatible with existing Visa infrastructure.

Another is AI, but again the companies are responding. Visa has spent ~$3B (past decade) on AI/data; uses AI (e.g., Advanced Authorisation) to prevent ~$28B in fraud annually and recently launched a $100M ‘Gen-AI’ fund. Meanwhile, Mastercard invested ~$7B in AI and cybersecurity over five years. Its AI model, trained on ~125B transactions, claims to boost fraud detection up to 300%.

Here’s one that they are behind on: crypto. The new Genius Act paves the way for dollar-pegged stablecoins—posing potential challenges to core networks. Visa and Mastercard still see stablecoins as limited today but per-transaction revenue is on a long-term decline. Both are exploring stablecoin and blockchain settlement to diversify beyond traditional card systems. But can they beat aspiring competitors?

Finally, we note geopolitics. Key to its growth will be through Visa and Mastercard’s growing acceptance in developing countries, particularly the Middle East and Africa. To this end, Mastercard has entered into strategic partnerships with Amazon and Kenyan telco Safaricom. Yet in a post-globalisation world, Mastercard’s stronger international exposure could make it slightly more vulnerable compared to Visa’s U.S.-centric focus.

So is it Mastercard or Visa?

We are going to say…it depends. It is a very close call and we think investors in neither stock will go wrong. But if you have to make a judgement call…we think Visa is better if you want stability, conservative financials, slightly better valuation? On the other hand, if you are comfortable with more leverage but higher growth potential, then Mastercard offers higher upside.