Visa Isn’t Where Citigroup Wants to Be
Citigroup Inc. is shaking up the credit card industry by snubbing the Visa brand in favor of MasterCard.
Citigroup, one of the nation’s leading credit card issuers, made the move after a weeks-long spat with Visa’s directors led to the resignations of Citigroup Chairman John Reed and another senior executive from the Visa board Tuesday. Visa is owned by a coalition of U.S. banks.
New cards issued by New York-based Citigroup will carry only the MasterCard logo. Existing Citigroup Visa cards that expire over the next several years will be replaced with MasterCards.
MasterCard, which has seen its share of the credit card market decline for more than 20 years, offered to give Citigroup a discount in its dues, and agreed to have the MasterCard symbol appear on the back of the card instead of on the front, said David Robertson, president of the Nilson Report, an industry newsletter.
Citigroup would confirm only that it has resigned from the Visa board; it made no comment about its future with MasterCard.
Citigroup is already a major issuer of MasterCard credit cards, which account for 53% of the cards Citigroup issues. But the Visa cards have been more heavily used, accounting for 55% of Citigroup credit card balances.
