PURCHASE, N.Y. - On the heals of its
initial public offering late last week, MasterCard International reported May 26 that it's extending more discount and rebate deals to its big-bank members.On May 17, MasterCard announced a
pricing and incentive deal with Bank of America - a reward deal from MasterCard for higher transaction volumes on B of A's MasterCard-branded cards. Last week, the credit card company said it signed similar deals with JP Morgan Chase & Co., Citibank and HSBC. Together the four banks own 31 percent of MasterCard's shares and account for 31 percent of MasterCard's net-transaction volume, according to regulatory filings.Each bank has a separate deal with MasterCard. The card company paid Citibank $1 million in 2005 and $100,000 for the first quarter of 2006; JP Morgan Chase got $4 million in '05 and $1 million '06; and HSBC was paid $1 million in '05 and $200,000 in '06. B of A received only minimal payments in '05 and none in '06.
MasterCard raised about $2.4 billion through last week's IPO and plans to spend all but $650 million to buy back shares from its bank-owners. The rest of the funds are expected to be used mostly to create a legal defense fund to pay potential settlements in the more than 40 suits pending by merchants and others.
