Banks Strike Deal With MasterCard
MasterCard International has signed discount and rebate agreements with three of its major bank-owners, similar to the deal it signed with Bank of America.
The separate agreements provide pricing discounts on fees and other incentives in exchange for transaction volumes on MasterCard-branded cards with Citibank, JP Morgan Chase and HSBC.
The three banks and BofA own almost 31% of MasterCard shares and accounted for the same percentage of net transaction revenue for the first quarter of 2006, according to documents filed with the Securities and Exchange Commission by MasterCard in connection with last week's initial public offering.
Under the separate deals, MasterCard paid Citibank $1 million in 2005 and $100,000 for the first quarter of 2006; JP Morgan Chase $4 million and $1 million, respectively; HSBC $1 million and $200,000; and BofA minimal payments for 2005 and none for 2006.