Master Card Inc (NYSE: MA) expects that it will begin taking market share in the debit processing business away from Visa (NYSE: V) during the next year or two because of the recently-passed Dodd-Frank Act, according to a report from Reuters, which interviewed na executive at MasterCard.
MasterCard chief product officer Tim Murphy said that he believes MasterCard will take more share in debit card processing during the “second half of next year, into 2012.”
Visa, MasterCard, American Express and Discover are still awaiting final rules from the Federal Reserve on how the Dodd-Frank act will be implemented. Banks are expected to wait until the Federal Reserve release final network rules in July 2011 before signing new contracts with processing networks.
MasterCard chief executive Ajay Banga previously predicted that the Dodd-Frank will help MasterCard increase its market share in the U.S. debit card business because the law prohibits exclusive debit processing contracts, means that banks that currently have exclusive contracts with Visa or another network will be forced to start doing business with other payment processing networks.
MasterCard Incorporated (MasterCard) is a payment solutions company that provides a variety of services in support of the credit, debit and related payment programs of approximately 23,000 financial institutions and other entities that are its customers. Through its three-tiered business model as franchisor, processor and advisor, the Company develops and markets payment solutions, process payment transactions, and provides support services to its customers and, depending upon the service, to merchants and other clients. MasterCard manages a family of payment card brands, including MasterCard, MasterCard Electronic, Maestro and Cirrus, which the Company licenses to its customers. In December 2008, MasterCard acquired Orbiscom Ltd.
Shares of MA traded up 0.98% during mid-day trading on Monday.
