Executive Summary
Visa Inc. and Mastercard Incorporated form one of the global economy’s most powerful duopolies. While their brands are ubiquitous, the mechanics of their business models are often misunderstood. This report provides a comparative analysis of how these payment technology giants generate revenue.
At their core, both companies operate on an identical foundation. They use an “open-loop,” four-party model that connects consumers, merchants, issuing banks, and acquiring banks. They are not financial institutions. They do not issue credit or assume the risk of consumer default. Instead, they operate the vast technology platforms—VisaNet and the Mastercard Network—that serve as the digital rails for global commerce. They earn fees on immense transaction volumes. However, this shared foundation gives way to increasingly divergent strategic priorities.
The analysis reveals Visa’s clear dominance in scale. In fiscal year 2024, Visa processed $15.7 trillion in total volume across 233.8 billion transactions. This generated $35.9 billion in net revenue.¹ Its business model is deeply rooted in monetizing this scale through transaction-centric revenue streams: Data Processing, Service, and International Transaction fees.
Mastercard is smaller, with $9.8 trillion in gross dollar volume and 159.4 billion switched transactions in fiscal year 2024.²,³ It has strategically positioned itself as a more diversified technology partner. This is most evident in its financial reporting, which is structured around two distinct pillars: the core Payment Network and a rapidly expanding Value-Added Services and Solutions (VAS) segment. In 2024, the VAS segment generated $10.83 billion. This accounted for a remarkable 38.5% of Mastercard’s $28.2 billion in total net revenue and is growing much faster than its core payments business.²,⁴
This report concludes that the competitive dynamic between the two companies is evolving. The fundamental mechanism of earning fees on payment volume remains the bedrock for both. However, Visa’s strategy now focuses on leveraging its scale to expand its “network of networks” into new payment flows, like business-to-business payments. Mastercard, conversely, is executing a clear strategy of differentiation through services. It embeds itself more deeply with clients through offerings in cybersecurity, data analytics, and loyalty programs. The future of this duopoly will be defined less by processing payments and more by their ability to innovate and monetize the ecosystem of services surrounding the transaction.
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