First Data is reporting a new debit card processing deal with Washington Mutual, as the US' largest savings and loan switches from Visa to MasterCard-branded cards.
First Data says it has been selected to provide authorisation and settlement processing for Washington Mutual's nine million signature debit card portfolio. This extends the previously announced relationship between the S&L and First Data's Star Network for PIN-secured, online debit point-of-sale, and ATM processing.
While the deal is good news for First Data it also represents a major boost for MasterCard as it bids to lure customers away from its larger rival. Washington Mutual is the third-largest debit card issuer in the US, with cardholders spending approximately $21 billion at merchants in 2004.
MasterCard's debit card customers spent $90 billion in 2004, against Visa's $375 billion total.
As such, Washington Mutual's switchover could boost MasterCard debit volumes by more than 20%.
The conversion will be completed by the end of the year, when Washington Mutual will also begin to issue MasterCard-branded credit cards.