In a filing with the Securities and Exchange Commission, MasterCard stated: The agreement was amended to include new pricing arrangements in exchange for transaction volumes related to the issuance of MasterCard-branded debit cards by Bank of America.
In a further statement, MasterCard commented: MasterCard Worldwide has reached an agreement to further build its business with Bank of America, adding that it looks forward to working more closely with Bank of America to provide its customers with increased levels of choice, flexibility and value.
Despite these assertions, Bank of America spokeswoman Betty Riess, commented: I wouldn’t speculate on any future plans, adding, We’re maintaining relationships with all three major payment networks, Visa, MasterCard and American Express.
A decision to issue MasterCard debit cards could have an adverse affect on Visa. Bank of America currently accounts for 20% of Visa’s business and, in autumn 2006, the bank and Visa USA announced a six-year extension to their 30-year card issuance agreement. If, however, Bank of America uses the revised pricing agreement with MasterCard as leverage in negotiating with Visa, this would increase pressure on Visa.
