# Visa Card: Definition, Types, How They Work, vs. Mastercard

![Man holding credit card using laptop in kitchen](https://www.investopedia.com/thmb/mKY8sMD1mdSP2c7oYlov_fh3A8k=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/144553740_HighRes-56a6a4593df78cf7728f8ad6.jpg)

**

> **Definition**
>
> A Visa card is a payment card that utilizes the Visa network for transactions.

## What Is a Visa Card?

A Visa card is a payment card that uses the Visa network and is branded with a Visa logo. The San Francisco-based company began with just [credit cards](https://www.investopedia.com/terms/c/creditcard.asp) but later expanded to include debit, prepaid, and gift cards. Although Visa cards bear Visa's name and logo, they are not issued by Visa but instead by partner financial institutions and banks.

### Key Takeaways

*   Visa cards are payment cards that use the Visa network for transactions.
*   Visa cards are not issued by Visa but by partner financial institutions.
*   Visa cards come with a 16-digit account number, microchip, magnetic stripe, and other features.
*   Types of Visa cards include credit cards, debit cards, prepaid cards, and gift cards.

## How Visa Cards Work

[Visa is a prominent processing network](https://www.investopedia.com/how-visa-makes-money-4799098) whereby its cards are accepted by businesses in more than 200 countries and territories worldwide. Other major [payment processing networks](https://www.investopedia.com/articles/personal-finance/020215/visa-vs-mastercard-there-difference.asp) include [Mastercard](https://www.investopedia.com/terms/m/mastercard-card.asp), [American Express](https://www.investopedia.com/terms/a/american-express-card.asp), and [Discover](https://www.investopedia.com/terms/d/discover-card.asp).

Financial institutions typically partner with a single processing network provider, such as Visa, for all of their payment card products. Each issuer sets its own [terms and conditions](https://www.investopedia.com/terms/t/terms-and-conditions-credit-card.asp) for the Visa cards it offers and decides on the customers to whom it will offer them. Visa cards are available to individual and business customers through various financial institution partnerships.

Visa also partners with merchants through varying types of service agreements. Merchants that accept Visa cards pay Visa Inc. a [transaction fee](https://www.investopedia.com/terms/t/transaction-fees.asp) each time a customer uses their Visa card.

All Visa cards come with a unique 16-digit number printed or embossed on the front and an embedded [microchip](https://www.investopedia.com/terms/c/chip-card.asp) intended to provide the cardholder with additional protection against fraud. There's also a [magnetic stripe](https://www.investopedia.com/terms/m/magnetic-stripe-card.asp) on the back, with a panel for the cardholder's signature and a three-digit [validation code](https://www.investopedia.com/terms/v/validation-code.asp).

> **Important**
>
> Although branded with the Visa name, Visa cards are issued by financial institutions, not Visa itself.

## Types of Visa Cards

Several different types of payment cards are branded with the Visa logo and use the Visa payment processing network: credit cards, debit cards, prepaid cards, and gift cards. Here is how each of them works.

## Visa Credit Cards

Banks and other financial institutions issue Visa credit cards to consumers whom they deem [creditworthy](https://www.investopedia.com/terms/c/credit-worthiness.asp) based on their [credit report](https://www.investopedia.com/terms/c/creditreport.asp) and other information. Like other types of [credit cards](https://www.investopedia.com/personal-finance/top-credit-cards-international-students/), Visa credit cards provide cardholders with convenience and security and can be used at merchants and [automated teller machines (ATMs)](https://www.investopedia.com/terms/a/atm.asp) worldwide.

Depending on the particular card and issuer, some Visa cards have features such as [0% introductory annual percentage rates (APRs)](https://www.investopedia.com/terms/z/zero-percent.asp), cashback rewards, and unique benefits when shopping with a particular retailer. All Visa credit cards come with the Visa Zero Liability Policy, which reduces cardholders' liability for unauthorized transactions to $0. Under federal law, their liability is generally limited to $50.

The card's interest rate is determined by the card issuer, who may also charge various fees, including the following:

*   Annual fees
*   Foreign transaction fees
*   Cash advance fees
*   Balance transfer fees
*   Late payment fees  
    

## Visa Debit Cards

Visa [debit cards](https://www.investopedia.com/terms/d/debitcard.asp) are linked to a cardholder's bank account, typically a checking account. Like a credit card, they can be used to make purchases at retailers and perform routine bank transactions at a branch or through an ATM. Unlike credit cards, debit cards do not extend credit but are limited to the amount of money in the cardholder's [bank account](https://www.investopedia.com/best-high-yield-checking-accounts-5070332).

As with Visa credit cards, Visa debit cards come with the Visa Zero Liability Policy for unauthorized transactions.

## Visa Prepaid Cards

[Prepaid cards](https://www.investopedia.com/ask/answers/042315/how-do-prepaid-debit-cards-work.asp) work like debit cards but are not associated with a [bank account](https://www.investopedia.com/best-joint-checking-accounts-5088312). Instead, they come loaded with a specific amount of money that acts as a credit limit. This means the cardholder can’t spend more than the amount loaded onto the card. Visa's prepaid cards can be used anywhere Visa is accepted and can be reloaded for future use.

In addition to its all-purpose prepaid cards, Visa has several types of specialized prepaid cards. Those include:

### Payroll Cards

Rather than issuing their employees checks or making direct deposits into their [bank accounts](https://www.investopedia.com/best-high-yield-savings-accounts-4770633), employers can pay them by regularly loading their pay onto a Visa payroll card, which works like any other prepaid card.

### Government Payment Cards

Some states use these cards to pay monthly unemployment benefits. The federal government also used them to distribute benefits as part of the [Coronavirus Aid, Relief, and Economic Security Act (CARES Act)](https://www.investopedia.com/coronavirus-aid-relief-and-economic-security-cares-act-4800707).

## Visa Gift Cards

[Gift cards](https://www.investopedia.com/terms/g/gift-card.asp) with the Visa logo are preloaded with a specific amount like a prepaid card and can be used wherever Visa is accepted. The [principal difference between them](https://www.investopedia.com/ask/answers/101314/what-difference-between-prepaid-credit-card-and-gift-card.asp) and prepaid cards is that gift cards can't be reloaded.

## What Is the Difference Between Visa and Mastercard?

Both Visa and Mastercard are vast, worldwide payment networks with similar operations. Neither issues its own credit cards but instead partners with [banks](https://www.investopedia.com/personal-finance/banks-pay-highest-interest-rates-savings-accounts/) and other financial institutions that do. Consumers with both types of cards may notice little or no difference between them. Conversely, American Express and Discover are payment networks that issue credit cards through their own banking affiliates.

## Does Visa Have Secured Credit Cards?

Yes, some financial institutions issue [secured credit cards](https://www.investopedia.com/terms/s/securedcard.asp) with the Visa logo. Secured cards are a type of credit card tailored for those with [poor credit](https://www.investopedia.com/how-to-consolidate-debt-with-bad-credit-strategies-and-options-8557822) or little or no credit history. To qualify for one, the individual must deposit a sum of money in a bank account, which serves as their credit line. After using secured credit for a certain period—and paying their bills on time—they may qualify for an unsecured credit card.

## What Do the Microchips on Visa Cards Do?

The microchips embedded on the front of Visa cards and other brands of cards carry [encrypted information](https://www.investopedia.com/terms/c/credit-card-encryption.asp) about the cardholder and their account. The [microchips](https://www.investopedia.com/terms/c/chip-card.asp) are designed to be more secure than the magnetic stripes on the cards' backs, which carry similar information. Today, most cards have both chips and stripes because some merchants have not yet switched over to sales terminals compatible with chip technology.

## The Bottom Line

Visa is a major payment card processing network, and cards bearing its logo are widely accepted worldwide. Whatever type of card a consumer might be looking for, a Visa-affiliated issuer probably offers it.

> **Article Sources**
>
> 1.  Visa. "[Unlocking Opportunities for Everyone](https://www.visa.com.my/about-visa/our_business/global-presence.html)."
>     
> 2.  Experian. "[Everything You Need to Know About Credit Card Issuers](https://www.experian.com/blogs/ask-experian/everything-you-need-to-know-about-credit-card-issuers/)."
>     
> 3.  Visa. "[Pay Every Day With a Visa Traditional Credit Card](https://usa.visa.com/pay-with-visa/cards/visa-credit-cards/visa-traditional-credit-cards.html)."
>     
> 4.  Consumer Financial Protection Bureau. "[Am I Responsible for Unauthorized Charges if My Credit Cards Are Lost or Stolen?](https://www.consumerfinance.gov/ask-cfpb/am-i-responsible-for-unauthorized-charges-if-my-credit-cards-are-lost-or-stolen-en-29/)"
>     
> 5.  Visa. "[Visa Debit Cards Are Fast, Easy, and Convenient](https://usa.visa.com/support/consumer/debit-cards.html#How_to_use_your_Visa_Debit_card_online-7d38)."
>     
> 6.  Visa. "[With Zero Liability You're Not Responsible for Unauthorized Charges](https://usa.visa.com/pay-with-visa/visa-chip-technology-consumers/zero-liability-policy.html#2)."
>     
> 7.  Consumer Financial Protection Bureau. "[What Is the Difference Between a Prepaid Card, a Credit Card, and a Debit Card?](https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-prepaid-card-a-credit-card-and-a-debit-card-en-433/)"
>     
> 8.  Visa. "[Discover the Advantages of Prepaid](https://usa.visa.com/pay-with-visa/cards/prepaid-cards/all-purpose-reloadable.html)."
>     
> 9.  Visa. "[How Payroll Cards Work](https://usa.visa.com/pay-with-visa/cards/prepaid-cards/payroll-card.html)."
>     
> 10.  Visa. "[About Government Payments Cards](https://usa.visa.com/pay-with-visa/cards/prepaid-cards/government-payment-cards.html#Am_I_able_to_order_an_additional_card_for_a_family_member_-374492312)."
>      
> 11.  Visa. "[FAQ About Visa Gift Cards](https://usa.visa.com/support/consumer/gift-card-balance.html)."