MasterCard is possible to lose users because of JPMorgan shift

JPMorgan Chase & Co. decided to shift more business to Visa Inc., thereby 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. This information was received from two people familiar with the matter but they declined to be identified because the switch hasn’t been officially announced. MasterCard, which collects fees to process payments between banks and merchants, held the portfolio since 2005. The customers had checking accounts at Seattle-based Washington Mutual Inc. until JPMorgan bought assets of the failed lender last year. Bidding for the accounts began in October. 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. According to the Nilson Report, Visa already controls about two-thirds of the U.S. debit market. Issuers are counting on more debit card use to make up for declining credit-card profit as the 8.9 % U.S. jobless rate drives up defaults. As Joanne Trout, a spokeswoman for Purchase, New York-based MasterCard, said, JPMorgan will keep some debit business with MasterCard, including cards co-branded with Continental Airlines Inc. and the Chicago Bears football team. According to the Nilson Report, Washington Mutual’s entire debit-card portfolio made up about 5 % of the U.S. debit card market, leaving MasterCard with more than 22 % of the market share.