Two of the largest Visa member banks in Brazil have obtained licenses to issue MasterCards, heralding a new era of "duality" in the largest South American consumer economy.

MasterCard International Inc. said last week that $78 billion-asset Banco do Brasil and $28 billion-asset Banco Bradesco had become principal members.

Richard Child, president of MasterCard's Latin America region, called it a definitive step toward dual issuance in a market that generated $17.5 billion of card volume last year, according to The Nilson Report.

The Oxnard, Calif., newsletter said Visa had a 46% to 44% edge in market share over MasterCard in the Brazilian market, followed by American Express at 7% and Diners Club at 3%.

Brazil is "in an impressive transformation," Mr. Child said. "Economic policies have instituted relative stability. Consumers' purchasing power has increased."

He said recent mergers had accelerated the move to duality. A MasterCard bank's acquisition of a failing institution that issued Visa cards prompted the rule changes needed to sanction duality.

Given Brazil's rapid economic growth, MasterCard expects its card total and sales volume in that country to double in the next three years, to 12 million and $20 billion, respectively.

The association, which is based in Purchase, N.Y., plans to open an office Aug. 1 in Sao Paulo, Brazil. It has hired Desmond Rowen Greene, a former executive of the Prosa credit card processing venture in Mexico, as vice president and general manager.

The card-issuing landscape will change rapidly, Mr. Child predicted, as Brazilian banks follow the pattern of those in other countries and "go dual" during the next year.

James F. Partridge, Visa's chief executive for Latin America, expressed confidence that a familiar aspect of the duality pattern in the United States and elsewhere would work to his association's advantage: "We always win when there is duality," he said during Visa's Latin American regional meeting last week in Orlando.

"The market is very competitive, very aggressive," Mr. Child said.

"As the new market unfolds, banks might maintain a stronger affinity" for one or the other association, he added, just as MasterCard and Visa banks in the United States typically lean toward one or the other even after becoming members of both. Duality began in the United States in the 1970s.

Meanwhile, both the MasterCard and Visa camps in Brazil are facing an onslaught from American Express Co., which recently signed up Brazil's sixth-largest bank to issue its cards.

Visa is resisting such cobranding by its Latin American members. MasterCard recently gave its banks lukewarm permission to work with American Express - regional managers must find that any resulting products do not put the MasterCard brand at a disadvantage.

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