Consumer Payment Card News

Look Who is Smiling Now

The industry may do what the U.S. Department of Justice is trying to do — unravel duality. Under duality, U.S. banks may issue both VISA and MasterCards. CitiGroup is threatening VISA it will move its card business to the MasterCard side. If other issuers follow CitiGroup to MasterCard we might see parity between VISA and MasterCard instead of duality. However this appears unlikely. Only CitiGroup and Bank of America have expressed any ambitions of building their own card brands. Most of the top ten issuers, especially non-banks, have little or no brand recognition. MasterCard may gain marketshare if it pulls CitiGroup and BankAmerica fully into its camp, but it will sacrifice its brand investments. MasterCard could gain about seven points in U.S. marketshare with CitiGroup and about two percentage points from Bank of America. In the U.S., VISA could end up with a 40% share and MasterCard with a 37% share. However the loss of CitiGroup to VISA is apparently of no great consequence in itself as Citi only contributes an estimated 6% of VISA’s fees. However it plays out, American Express and Discover may ultimately be the real winners, if the MasterCard brand is weakened by ‘CitiCard’ and ‘BankAmericard’. For more information on the industry marketshare and other statistics please visit CardFlash ( or CardData ( Both services are fee-based.

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