MasterCard Inc. continued to build its debit share with the addition of roughly 2 million debit cards issued by Sovereign Bank.
Sovereign, a unit of Banco Santander SA, said Tuesday that it plans to switch that many debit cards to MasterCard from Visa Inc. at the beginning of next year.
In a conference call the same day to discuss its third-quarter earnings, MasterCard also highlighted its work with China UnionPay, the country's sole government-owned payment network, which struck a deal for online access to MasterCard's network. That agreement was announced in September.
"Each of these deals is a hard-fought deal," Ajay Banga, MasterCard's chief executive, said on the call. "It's just good old hard work, [that's] what we bring to the party."
Analysts said the Sovereign agreement only begins to chip away at Visa's position in the payments business. Sovereign, for example, is a small win for MasterCard relative to its loss of Washington Mutual in 2008.
"I wouldn't say this is a big trend," said Thomas C. McCrohan, managing director for equity research at Janney Montgomery Scott in Philadelphia. "It's such a commanding lead that Visa has in … debit."
That doesn't mean this "modest" win should be overlooked, said UBS Securities LLC senior analyst Jason Kupferberg.
"[MasterCard] is continuing to gradually build on some of their new momentum on gaining some of the new debit portfolios," he said.
Kupferberg said the deal with China UnionPay was significant because MasterCard has a better relationship with China UnionPay than Visa does. "The battleground going forward is definitely the emerging markets, picking the growth markets and having a strategy that has to be local."
Sovereign, of Wyomissing, Pa., is neither MasterCard's first win over Visa nor its biggest. In January it snatched SunTrust Banks Inc.'s debit card portfolio away from Visa. That deal added about 5 million accounts to the MasterCard portfolio.
Banga said MasterCard is working to add more success stories.
"I'm determined to be out there, meeting clients, meeting regulators, meeting leaders," he said.
Banga also discussed the Purchase, N.Y., company's efforts to improve its position in e-commerce and mobile. "We're beefing up our capability," he said.
At its investors day in September, MasterCard detailed its plans to let developers that want to use its systems register online for access to MasterCard's application programming interface, which will let them use its network.
In October, MasterCard acquired DataCash Group PLC, a move analysts said was a response to Visa's July purchase of CyberSource Corp.
Outside the U.S., MasterCard's credit and charge card purchase volume rose 10.8%, to 3.28 billion. Sales on the cards rose 10.8%, to $267 billion. Debit card purchase volume outside the U.S. rose 33.4%, to 843 million. Sales on the cards rose 24.3%, to $46 billion.
MasterCard's net income rose 14.6% from a year earlier, to $518 million. Its net revenue rose 5.1%, to $1.43 billion.
In the U.S., the number of credit and charge card purchases rose 0.7%, to 1.5 billion. Sales on the cards rose 0.8%, to $122 billion. Debit purchases dropped 4.7%, to 2.01 billion in the U.S. and sales on debit cards dropped 2.5%, to $79 billion.
MasterCard's stock price was up 3.02% midday Tuesday, to $246.21.
Sovereign said it could not make an executive available for an interview Tuesday.
