Slideshow 8 Ways Visa and Mastercard Are Reshaping Their Markets

  • July 22 2016, 9:47am EDT

Visa and Mastercard both face the prospect of becoming "dumb pipes" as other companies innovate on top of their networks. To combat this trend, both are taking steps to be major players in the digital economy.

Visa Makes Peace with PayPal

The card networks have been at war with PayPal since the alternative payment company launched in 1998, and Visa finally seems to have found a way to coexist with its digital rival — in a deal that required heavy concessions from PayPal on how it deals with card transactions.

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Mastercard Bets Big on Vocalink

Mastercard is also making peace with a digital upstart, the U.K.'s VocaLink, which is behind the Zapp online payment tool. The $920 million investment gives Mastercard access to technologies that can help it compete against Visa in areas that are still new to both networks.

Visa Reunites with Visa Europe

Visa's reunification with Visa Europe gives the card network a chance to reenter hubs of fintech innovation such as London while also exporting the tech resources it has developed in the U.S.

Mastercard's Master Plan for Asia

Mastercard, meanwhile, has its sights set on business opportunities in Asia. Its strategy of offering customized services to merchants and issuers pairs with a regional focus on countries such as China, Myanmar and India.

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Visa's Olympic Event

Visa has spent years using its sponsorship of the Olympic Games as an opportunity to test and promote new technology, and Rio is no exception. The card network is distributing payment-enabled NFC rings to athletes to let them make purchases without a wallet or phone.

Masterpass Makeover

Mastercard is reinventing its Masterpass platform to make it a friendlier option for banks and merchants. The new version ties directly to banks' digital wallets and enables contactless payments on Android handsets.

Redefining EMV

Starting with Visa, the four major U.S. card networks have all developed technology that can speed up the process of making an EMV payment at the point of sale. The goal is to counter the anti-EMV sentiment that comes from consumers and merchants who don't have the patience for the new process.

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Selfie Security

Mastercard's new approach to 3D Secure taps into a habit consumers love: Taking their own pictures. The new option, enabled at the discretion of Mastercard issuers, allows selfies to improve security at certain merchant sites.