Visa v. MasterCard, Round 6

According to the article in the Wall Street Journal by Jathon Sapsford and Mitchell Pacelle, "the heavyweight fight between Visa USA Inc. and MasterCard International, is getting even more bitter." In July, Visa notified a list of 100 key issuers of its card that, if they chose to leave Visa in order to issue debit cards under a rival brand, they would be assessed a large special "exit fee." The fee was levied after Visa agreed to pay $2 billion to settle an earlier lawsuit filed by Wal-Mart and other retailers. Initially, the exit fee was to apply to defections to any other card, but following discussions between Visa and the U.S. Department of Justices, the rule was amended to apply only to banks leaving Visa for MasterCard. MasterCard does not assess an exit fee to its members. In September, 2003 MasterCard filed suit against Visa to challenge the fee on the grounds that it violated the October 2001 court ruling in an antitrust case against the associations brought by the Justice Department. A federal judge is expected to rule on the fee before the next issue of Spotlight.

Visa is the world's largest issuer of credit and debit cards. There are 369 million cards carrying its brand in the U.S. alone. It dominates the debit card market; the largest and fastest growing segment of the electronic payments industry.