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JPMorgan Chase & Co.'s purchase of Washington Mutual Inc. marries two of the
nation's four largest debit card issuers, and the deal could be bad news for MasterCard Worldwide, an analyst says.
According to PaymentsSource, an ATM&Debit News sister Web site, New York based Chase had issued 13.9 million debit cards by the end of 2007, including 1.8 million PIN and 12.2 million signature debit cards. That made Chase was the third-largest debit card issuer behind Charlotte, N.C.based Bank of America and Wells Fargo Bank, which is based in San Francisco.
WaMu was the fourth-largest debit card issuer, according to PaymentsSource. At the end of 2007, Seattle-based WaMu had issued 13.2 million debit cards, including
12.5 million PIN and 742,000 signature debit cards. The union of Chase and WaMu
carries implications for the industry, says Adil Moussa, an analyst with Boston-based Aite Group.
Chase issues Visa-branded debit cards, and WaMu converted its Visa debit card
portfolio to debit MasterCard in 2006, Moussa says. "There might be a chance for Visa to convert Washington Mutual's debit card portfolio back to Visa," he says. "It won't happen right away, but it could happen."
Bruce Cundiff, director of payments research and strategy at Pleasanton, Calif.-
based Javelin Strategy & Research, was more blunt. "I don't think this is a good day for MasterCard," Cundiff says. "I am sure MasterCard is scrambling to make sure those cards remain with MasterCard. MasterCard's debit cards are definitely in
jeopardy."
WaMu announced in April its intention to convert 12 million to 15 million of its
debit MasterCards to MasterCard PayPass contactless cards before the end of the
year. It is not clear what will happen now. Blink is Chase's contactless brand, and
most of the cards are credit cards, Cundiff says.
Meanwhile, despite the takeover, Chase told WaMu customers to expect business
as usual at their local branches.
