If Visa U.S.A. and MasterCard International are nervous about First Data Corp.’s plans to make a grab for some of their market share in transaction processing, they aren’t showing it.

In June, Denver-based First Data announced it would buy a majority interest in NYCE Corp. and use its electronic funds transfer network as the centerpiece of a network it is building.

The new network, First Data Net, would bypass those run by Visa and MasterCard, which would still be able to collect the interchange fees from the merchant’s bank for the transactions, but not the transaction fees .

Both Visa’s and MasterCard’s regulations permit processors to move transactions along without using the associations’ networks, and the two card companies say they should be able to retain their market share.

“There’s nothing at Visa to preclude [First Data] from doing that,” Scott Thompson, Visa USA’s chief technology officer, said in a July interview. “But the great majority of all merchants choose to switch their transactions through VisaNet. We hope that continues to be the case.”

First Data president Charles T. Fote said his company’s network would help merchants save money.

“The interchange fee between the merchant banks and the cardholder bank will continue to be in place” for Visa and MasterCard, he said. “That’s a factoring rate for receivables. The transaction fee should only be paid to people who need to touch that transaction. Those are the cost settlements that our First Data Net addresses.”

Mr. Thompson said the fee that merchant banks pay to the cardholder banks varies by the type of merchant involved in the transaction. “A mail-order merchant would have a different reimbursement fee than a supermarket.”

While some of Visa’s merchant customers may choose to jump ship for First Data Net, the majority will continue to rely on VisaNet because of its reliability and security and because merchants trust Visa, he said. “At the height of the holiday season, VisaNet will authorize and settle up to 5,000 transactions per second.”

Last year the network switched 35 billion transactions, and Visa is upgrading it with the goal of processing 100 billion transactions a year in the United States by 2004.

Jerry McElhatton, senior executive vice president of global technology and operations at MasterCard, addressed First Data Net in a written statement last month.

“With our members’ input, MasterCard has built a strong global network that adds value to financial institutions worldwide,” he said in the statement. “We are delivering advanced processing solutions to our members that help them leverage processing as a competitive advantage. We are confident that our system enhancement strategy, combined with the industry’s first virtual private network, delivers significant value that makes MasterCard the best, most reliable, and preferred global payment platform.”

Mr. Fote said that First Data has been authorizing and settling some transactions without going through Visa or MasterCard for many years. But now, with the plan to buy a majority stake in NYCE and develop First Data Net, the company is prepared to close the loop on the majority of their transactions, he said.

If companies insisted on routing a transaction through either Visa or MasterCard, First Data would accommodate them, but “the banks and other players at some point will have to see … has the least number of stops, lower cost, and quicker transaction movement,” Mr. Fote said. “Eyes are going to open and see this is the right thing to do.”

David Balto, an expert in antitrust law and a partner at the Washington firm of White & Case, said First Data Net could be the first genuine threat to Visa’s and MasterCard’s decades-long dominance in the network market.

“You should not expect them to sit on the sidelines in response,” he said. “They’ll come up with numerous initiatives to face this threat. But as the Microsoft [antitrust] decision instructs, there’s a fine line between hard-nosed competition and exclusionary conduct.”

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