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JPMorgan Chase & Co., which yesterday acquired Seattle-based Washington Mutual Inc.'s retail banking business for $1.9 billion after the Federal Deposit Insurance Corp. shut down WaMu, plans to reissue cards with the Chase brand as it reissues expiring WaMu cards, WaMu is informing online-banking customers on its Web site. Chase does not intend to change card numbers during the conversion, WaMu says. But whether the cards carry the Visa or MasterCard brand has yet to be decided, Paul Hartwick, a Chase Card Services spokesperson, tells CardLine. Such changes tend take awhile, Bruce Cundiff, director of payments research and consulting at Javelin Strategy & Research, tells CardLine. "When you've got card issuers buying a portfolio, it tends to be pretty stagnant in terms of migrating cards," Cundiff says. "Certainly you can issue a new card that says Chase instead of WaMu, but there are logistical things that lend themselves to the status quo." Changing data on magnetic stripes or Near Field Communication chips carries an additional expense, and migrating cards from MasterCard to Visa, or vice versa, can be complicated, he notes. New York-based Chase does not disclose the percentage of credit cards in its portfolio that are Visa or MasterCard. Though Chase tends to associate its card advertising more closely with Visa, "I don't necessarily think Chase is really so focused on being a Visa bank per se," Cundiff says. "They have to do the cost analysis of what that means if they want to rebrand from MasterCard to Visa or Visa to MasterCard." Despite such uncertainty, Cundiff says the takeover is "not a very good day for MasterCard debit." WaMu began converting its debit cards from Visa to MasterCard in 2006, and WaMu earlier this year announced plans to issue 12 million to 15 million contactless PayPass debit cards (CardLine, 4/1). Cundiff believes Chase ultimately will reconvert all of WaMu's old debit cards back to Visa. Adil Moussa, an analyst with Boston-based Aite Group, agrees there might be a chance for Visa to convert WaMu's debit card portfolio back to Visa. "It won't happen right away, but it could happen," he says. "As you know, there's a lot of competition between Visa and MasterCard." MasterCard Worldwide would not discuss the competition but noted in a statement it has a "long-standing debit and credit relationship with JPMorgan Chase, and our primary focus is to support our customer through this period of integration and beyond."
