What is the difference between Maestro and Mastercard?
If you’re an expat living in the Netherlands, you might have noticed there are some different payment methods than the good old Mastercard. Maestro card is the only card that lets you pay for anything and everything in the Netherlands. The question is; why and how are these two cards different from each other?
The surprising fact is, there is actually no rivalry between them, as it seems. The main difference is that Maestro works only as a debit card, whereas Mastercards can be issued as debit, credit, or prepaid cards. However, both Maestro debit cards and Mastercards are issued by Mastercard Inc. which is the second-largest payment-processing corporation worldwide. Therefore, although it can be easy to confuse the two, they are not competitors, but just different products of the same group.
Why do we use Maestro cards in the Netherlands?
You can easily notice that credit cards are not as much in demand in the Netherlands as they are in the US or other European countries. According to World Bank’s data from 2021, 38% of the Dutch population aged 15+ owns credit cards, but they are more likely to use them for their transactions abroad or online instead of daily payments. Also, from a customer behavior perspective, Dutch people are considered as being extremely debt averse. It is not surprising that the word guilt and debt are the same words in Dutch; “schuld”.
The bright side is that Maestro cards are recognized worldwide, offering convenient access to money at home and abroad. They are especially popular in Europe with the largest European markets being Germany, Austria, the Netherlands, Belgium, and Switzerland.
Payments made via Maestro cards also reduce the need for physical cash, providing a safer place to spend and keep your money. Customers can make cash withdrawals at ATMs and conduct contactless or PIN-verified/contactless payments in stores.
Since debit purchases are deducted directly from your account, it’s easier to track your spending. In terms of personal finance, you can easily minimize the risk of overspending by using a debit card like Maestro because you’re only allowed to use the money you already have in your account.
Can I use my Maestro Card for online shopping?
Although 400 million Maestro cards are in circulation around the world for online and offline shopping purposes, the format of Maestro card numbers with up to 19 digits isn’t compatible with many e-commerce portals. It was launched in 1991, when online shopping was not a thing. Therefore, making an online transaction with your Maestro card still requires an additional intermediary.
On the other hand, the Mastercard network is twice as large as Maestro. It supports more e-commerce transactions, and the card number’s digits are compatible with the majority of e-commerce websites or apps for subscriptions.
What does the future look like for Maestro cards?
The good news is that you don’t need to make a choice anymore because Mastercard is intervening in this absurd situation. As of 1 July 2023, the company will stop issuing Maestro-branded cards after more than 30 years of circulation. Maestro-branded products will be replaced by Debit Mastercard and after July 1, 2027, Maestro cards in circulation will no longer be functioning.
To ensure a seamless transition, cardholders are not required to take any action as Mastercard and its partner banks work to maintain smooth operations. If cardholders’ Maestro card expires after 1 July 2023, their bank will send a new debit card that will be linked to their current account, and operate the same way as their old Maestro, but with greater capabilities.
While witnessing another drastic transmission in the payments sector thanks to the dominance of e-commerce in the post-covid era, we are curious to see more innovations in online payments and the banking sector! If you’re a fintech-savvy person who is curious about everything fintech, subscribe to our newsletter to be up-to-date with the latest news in the industry.
Do you want to be a part of the dynamic fintech industry, or are you looking for unique talents in fintech to accelerate your company within the industry? Check out PCN’s job board to find the right job for your professional journey or contact us now and let’s see how we can help you with our hiring or media services.
