Aite Group expects American Express to become a significant competitor for Visa and MasterCard in the coming years, even as Visa becomes a publicly traded company.

Boston, MA, November 7, 2007 – A new report from Aite Group, LLC considers how the world will look in a post-Visa IPO world, in which the four major card networks, Visa, MasterCard, American Express and Discover, are publicly traded companies. It addresses whether Visa and MasterCard may ultimately lose out to American Express and Discover, and whether Visa and MasterCard will have to alter their business model in order to remain competitive. It also provides three performance metrics, which can be used to track the race between the card networks.

According to the report, titled "The Future of Card Networks: Gauging Battle-Readiness for a Post-Visa IPO World," the 2004 decision by the U.S. Department of Justice to repeal the exclusionary rules that prevented Visa and MasterCard's members from using other networks has fundamentally changed the card industry. Now, the major bank networks are suddenly competing directly for issuers' business with American Express and Discover.

"Our analysis suggests that American Express is likely to be a significant threat for Visa and MasterCard, particularly in the United States, which is a key market for them," says Gwenn Bézard, research director for Aite Group and author of this report. "Outside of the United States, a major wildcard that could affect the competitive landscape faced by Visa and MasterCard lies with the strategic directions that will be taken by China UnionPay, JCB and a multitude of regional networks, notably in Europe."

This 24-page Impact Note contains 21 Figures. Clients of Aite Group's Retail Banking Service can download the report by clicking on the icon to the right.

Related Aite Group Research:

• Prepaid Cards: The State of the Industry
• The Next Big Thing in Cards: Co-Branded Decoupled Debit Cards
• Biometric Payments and Rewards: A Case Study
• Loyalty & Rewards: A Market Overview

To purchase this report or
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Aite Group Sales
Tel: +1.617.338.6050
sales@aitegroup.com