MasterCard Inc.’s (MA) debit platform is about to receive a substantial blow business-wise. According to financial news service Bloomberg – MasterCard will lose more than half of a $59 billion portfolio of U.S. debit-card users after JPMorgan (JPM) decided to shift more business to Visa (V), two people familiar with the matter said.
From Bloomberg: 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.
“It is a fairly substantial blow for the company’s debit platform,” said John T. Williams, an analyst at Macquarie Capital in New York, in a research note. “The biggest motivating factor was Visa’s robust debit platform, which is considered by many to be superior to MasterCard’s.” He rates both networks “outperform.”
The new shift strengthens Visa’s hold on debit cards. The co. already controls about two-thirds of the U.S. debit market, according to the Nilson Report.