Source: BloombergComplete Item: http://www.bloomberg.com/apps/news?pid=20601087&sid=afXOJIFHtiS0&refer=home
MasterCard Inc., the world’s second- largest electronic payments network, will lose more than half of a $59 billion portfolio of U.S. debit-card users after JPMorgan Chase & Co. decided to shift more business to Visa Inc., "two people" familiar with the matter said.
MasterCard held the portfolio since 2005, said "the people", who declined to be identified because the switch hasn’t been officially announced. The customers had checking accounts at Seattle-based Washington Mutual Inc. until JPMorgan bought assets of the failed lender last year, the people said. Bidding for the accounts began in October, "the people" said.
“We recognize that given the highly competitive nature of our industry and the challenging environment facing our financial institution customers today, decisions such as these can occur,” said Joanne Trout, a spokeswoman for Purchase, New York-based MasterCard. The move won’t have a material impact on MasterCard’s revenue, Trout said. (priceless?)
The shift strengthens Visa’s hold on debit cards as consumers use them for a bigger share of their purchases, including staples such as gasoline and food. Visa already controls about two-thirds of the U.S. debit market, according to the Nilson Report, an industry newsletter. Issuers are counting on more debit card use to make up for declining credit-card profit as the 8.9 percent U.S. jobless rate drives up defaults.
Continue Reading
