Your guide to Mastercard and how it works

Key takeaways

• Mastercard is a global payment network used to process card payments safely and securely.

• Mastercard works with many banks and card providers across credit, debit and prepaid cards.

• Choosing a credit card for its individual features is usually more important than choosing between Mastercard and Visa.

What is Mastercard?

Mastercard is a payment network, similar to Visa or American Express. It doesn’t usually issue cards directly to customers, but instead provides the technology that banks and card providers use to process transactions.

If your credit card has the Mastercard logo and the retailer accepts Mastercard, you can use it to pay for goods and services.

How does Mastercard work?

Mastercard credit cards work in the same way as other credit cards – you make a payment, the transaction is authorised, and the amount is added to your credit card balance.

Mastercard’s role is to help route and process the transaction between the retailer’s bank and your card issuer. Your card issuer checks whether the transaction can be approved, for example whether you have enough available credit, then the payment is authorised.

What types of cards use Mastercard?

Mastercard is used on many different types of cards. These include:

• Credit cards: Spend on your card using your pre-agreed credit limit. You then agree to repay the debt you owe at a later date

• Debit cards: Spend on your card and the money comes straight out of your current account

• Prepaid cards: Preload money onto the card and you can then spend the funds as and when you want

Who does Mastercard work with?

Mastercard works with a wide range of banks, building societies and card providers. Examples of UK credit card providers that may offer Mastercard products include:

1. Aqua

2. Capital One

3. Halifax

4. John Lewis

5. Lloyds Bank

6. M&S Bank

7. MBNA

8. Natwest

9. Post Office  

10. Sainsbury’s Bank

11. Santander

12. Tesco Bank

13. TSB

14. Virgin Money

Where can you use Mastercard?

Mastercard is accepted widely around the world, including online, in shops and at cash machines. According to Mastercard, its network supports payments in more than 150 currencies across more than 220 countries and territories.

While many merchants accept Mastercard to make payment easier for shoppers, they can choose which payment networks they wish to work with – and this may change from time to time.

What’s the difference between Mastercard and Visa?

The payment process feels very similar to customers whether they use Mastercard or Visa. You can usually pay online, by contactless, with a mobile wallet or by entering your PIN at the point of sale. But beyond this there are some differences, including: 

Overall, there isn’t much to pick and choose between Visa and Mastercard.

Most credit card customers will be better off choosing based on the type of card they need – for example, balance transfer, purchase, or rewards – as well as the interest rates, fees and terms on offer.

What benefits does Mastercard offer?

Some Mastercard cards may come with extra benefits, such as fraud protection, emergency card support, retail offers or access to experiences through Mastercard Priceless. The benefits available will depend on the card issuer, the type of card and the terms of the deal, so it’s worth checking carefully before applying.

Depending on your card and issuer, benefits may include:

• Zero fraud liability: You usually won’t be held responsible for unauthorised transactions, provided you meet the policy conditions.

• 24-hour support: Mastercard can help with card-related issues such as reporting a lost or stolen card, emergency card replacement, emergency cash advances and finding your nearest cash machine.

• Exclusive content and experiences: Mastercard Priceless offers cardholders a range of free and discounted experiences across categories such as arts and culture, sport, food, travel and retail.

With Mastercard World and World Elite you’ll be offered additional rewards. These vary by card type and issuing bank, so it's best to check when you apply for a specific credit card.

Are there alternatives to Mastercard?

Mastercard and Visa are the main two payment processing networks. American Express is a third option, but it isn’t accepted by as many retailers.

It’s also different from Mastercard and Visa in being a card issuer as well as a card network processor. Discover is a US payment processor that also has a global reach to around 200 countries. 

Kara Gammell
Personal Finance & Insurance Expert

Our expert says

“Whether your card has the Mastercard or Visa logo on it, it’s rare to find a retailer that won’t accept it for payment.

"That means that when it comes to picking a new credit card, it’s the other features you should focus on – such as interest-free periods and rewards – that will have a more direct effect on your finances.”

Ready to find a new credit card?

If you’re looking to find a new credit card, MoneySuperMarket can help.

We’ll ask you a few quick questions to find out what type of card you need, then run a soft search that won’t leave a mark on your credit report.

We can then show you card deals from our leading panel of providers along with your personalised chance of being approved, so you can apply in confidence to get the deal you want. 

We’ll also show you any card for which you’re pre-approved. This means that if everything stays the same in your application then the interest rate, interest-free period and fee (if there is one) are all confirmed and will be as stated – the only thing not guaranteed is your credit limit.

MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this service. Instead we are usually paid a fee by the lenders, but the size of that payment doesn’t affect how we show products to customers.