MasterCard, Europay To Merge Operations
MasterCard and Europay have "agreed the outline of a merger designed to bolster MasterCard's position against arch-rival Visa", in a move consolidating links formed in 1996, according to the Financial Times. Although the two boards are not expected to make an announcement before the summer, a merger would cut costs and align their strategies. MasterCard owns 12.25 per cent of Europay, with an approved proposal standing to create the world's largest debit card network and a credit card network second only to Visa.For some time now, Europay had considered extending its global reach through alliances with card firms such as Japanese card firm, JCB, and Discover, the brand owned by MSDW. But a deal with MasterCard makes sense seeing that Europay has the exclusive rights to promote MasterCard in Europe, while its debit card brand, Maestro, is a joint venture with MasterCard. Europay seats on MasterCard's board. Some legal details remain to be resolved, such as whether European banks would be exempted from possible damages MasterCard faces if a multi-billion dollar lawsuit brought by US retailers, is successful. Under the all-share proposal, the European banks controlling Europay stand to be offered new shares representing between a quarter and a third of MasterCard, which will remain in Related Links
US Chip Players To Play 'Leapfrog' For Edge
PayPal, InternetCash Testing Debit Cards