Should I Invest in Visa or Mastercard?

Roberto Rivero

In uncertain times, many investors prefer to park their capital in defensive stocks, that is, companies that operate in industries which can generate reliable earnings regardless of the health of the economy.

Mastercard and Visa effectively have a duopoly on debit and credit card payment processing around the world, making them both textbook examples of defensive stocks. But which is the better fit for your portfolio? In this article, we compare Mastercard vs Visa and examine whether investors should invest in Visa or Mastercard in 2023.

Visa and Mastercard

Visa and Mastercard are two companies which need little introduction. In fact, with a combined 7.2 billion cards issued worldwide¹, chances are, most readers have a card in their wallets emblazoned with either the Visa or Mastercard logo.

Both companies operate in the electronic payments industry, which it dominates. However, unlike its closest rivals, such as American Express and Discover, neither Visa nor Mastercard issue their own cards or extend credit to cardholders.

Instead, cards are issued by third party banks and credit providers, with Visa and Mastercard providing the payment processing network through which the payments travel. Every time a card payment travels through either company’s vast network, they charge a fee. This means Visa and Mastercard generate revenue from card payments without being exposed to the risk involved in extending credit to consumers.

So, Mastercard vs Visa, which stock is the better investment? Let’s start by examining each company in a bit more detail.


Of the two companies, Visa traces its origins back further and is the larger, both in terms of market capitalisation and revenue.

In the full year ended 30 September 2022, Visa produced net revenue of $29,310 million and operating income of $18,813 million. That’s an operating margin of 64%. For those unfamiliar with the term, an operating margin measures operating income as a percentage of revenue and, to be clear, 64% is high.

Furthermore, this high operating margin is far from a flash in the pan. In Visa’s full year results for 2020 and 2021, it reported operating margins of 64% and 66% respectively.

Herein lies an attractive quality of Visa. The company invested a lot of money over the years constructing and expanding its payment processing network around the globe. However, once built, the network is inexpensive to maintain, meaning that Visa’s investments in the past have translated to high margins today. We will see a similar story with Mastercard shortly – although, spoiler alert, Mastercard’s margin is not quite as high.

In terms of its geographical footprint, Visa is a global operation, with a large proportion of payments on its network taking place in the US. Consequently, this is where most of its revenue is concentrated.

Below is a table showing Visa’s total payment volume in the quarter ended 31 December 2022.

US Payment Volume International Payment Volume
$1.480 trillion $1.449 trillion

Source: Visa – Form 10-Q

In other words, Visa is very exposed to the US economy and US consumption. Given the nature of Visa’s business model and how it generates its revenue, this is important to bear in mind and its significance will be more apparent later, when we examine whether to invest in Visa or Mastercard.


Slightly younger and smaller, Mastercard makes up the other half of the global duopoly on payment processing. But don’t make the mistake of discounting it on account of its smaller stature; in fact, for many investors this is somewhat of an attraction, as it suggests the company has more room for future growth.

In the full year ended 31 December 2022, Mastercard generated $22,237 million in net revenue and reported operating income of $12,264 million, resulting in an operating margin of 55%. As already noted, this isn’t quite as high as that of Visa, but it is still high and, like Visa, this is not merely a one-off. In each of the last two years, Mastercard have reported an operating margin of 53%.

No need to explain again why this is the case, as it is the same with Visa. Both companies are reaping the rewards of earlier investments through the form of high margins.

Depicted: Admirals MetaTrader 5Mastercard Inc. Weekly Chart. Date Range: 18 September 2016 – 24 March 2023. Date Captured: 24 March 2023. Past performance is not a reliable indicator of future results.

Like Visa, Mastercard operates around the globe. However, when we look at where the majority of its payment volume occurs and, consequently, where the majority of its revenue is generated, we see a different story.

Below is a table showing Mastercard’s total payment volume in the quarter ended 31 December 2022.

US Payment Volume International Payment Volume
$699 billion $1.434 trillion

Source: MastercardQ4 and Full Year 2022 Results

Mastercard’s slice of the US market is considerably smaller than that of Visa and, whilst its international payment volume is more or less the same as Visa in nominal terms, it makes up a far larger proportion of its total payment volume. In other words, unlike Visa, Mastercard is more exposed to the international economy than that of the US.

Should I Invest in Visa or Mastercard?

Both Visa and Mastercard have provided excellent shareholder value over the years - both in terms of capital growth and dividend distributions - and both seem well-positioned to continue to do so in the future.

The way in which both companies generate earnings mean that they have the potential to perform well in all stages of the economic cycle. When the economy is expanding, consumers spend more money, meaning more revenue for Visa and Mastercard.

Nevertheless, when the economy is struggling, consumers still need to pay for essentials at the very least, meaning that both companies should be able to continue to rely on revenue from their payment network, albeit perhaps not as much.

This has been demonstrated over the last year, with both companies performing robustly despite the challenging economic landscape.

In addition, the last couple of decades have seen consumers steadily moving away from cash and towards electronic payments, most of which run on top of the Visa and Mastercard networks. This long-term trend, which benefit both companies, was accelerated by the Covid-19 pandemic.

At the time of writing, there is disquiet in the banking industry. Silicon Valley Bank and Signature Bank in the US have recently gone under and a beleaguered Credit Suisse has just been absorbed by UBS, another Swiss banking giant. Whilst this may not end up in a full-blown banking crisis, it highlights an advantage of investing in Visa and Mastercard.

Both companies act merely as intermediaries. Their branded cards facilitate payments between customers and merchants, a privilege for which they charge a fee. But neither company extends credit, which is instead done by the card-issuing financial institution.

Whilst this means Visa and Mastercard don’t make any money on interest or late payment fees, it also means that they’re not exposed to bad credit, meaning their downside in a fully-fledged banking crisis would be limited.

Mastercard vs Visa

Although both companies dominate the global payment processing industry, as we saw in the last sections, they each dominate slightly different segments of the market. So, when it comes down to Visa vs Mastercard, it helps to consider their main revenue sources.

Visa has a larger share of the US market, whereas Mastercard is more exposed internationally. Therefore, if you are struggling to decide whether to invest in Visa or Mastercard, the answer lies in how strong you think US consumption will be compared to the rest of the world.

Consequently, if investors feel more bullish on the future of US consumption in comparison to international consumption, then Visa may be the better choice. Conversely, if investors feel that the opposite, then Mastercard could be the right fit.

However, this also means that maybe it isn’t a case of Visa or Mastercard after all. Both companies provide exposure to different areas, and both companies have proved quality investments historically. Therefore, there is an argument to be made for investors to include both Visa and Mastercard in their portfolios and, indeed, many do.

Nevertheless, before deciding whether to invest in either company, it is important to weigh the potential risks. Although both companies may be considered examples of defensive stocks, it is likely that they would still be negatively impacted by an economic downturn.

A recession, particularly a prolonged recession, typically results in a drop in consumption and, given how both Mastercard and Visa generate revenue, this would likely lead to a fall in earnings, which could have a knock-on negative impact on share price.

How to Invest in Mastercard and Visa

Those who are interested in investing in Mastercard or Visa will be pleased to know that, with an Invest.MT5 account from Admirals, it’s possible to invest in both companies as well as more than 4,500 other companies from around the world.

In order to invest in Mastercard or Visa, follow these steps:

  1. Open an Invest.MT5 account and log in to the Dashboard
  2. Find your account details in the Dashboard and click ‘Invest’ to open our Native Trading platform
  3. Search for Visa or Mastercard and click on the symbol to bring up the stock’s information
  4. Enter the number of shares you wish to purchase and click ‘Place order’ to send the order to the market!
Depicted: Admirals Native Trading – Mastercard Inc. Date Captured: 27 March 2023. Past performance is not a reliable indicator of future results.

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External Sources

    1. Visa Fact Sheet
    2. Mastercard Q4 2022 Earnings Release


The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:

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  • The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
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