USAA, one of the largest issuers of credit and debit cards in the United States, switched its portfolio to Visa Inc., ending a three-decade relationship with MasterCard Inc.
USAA, which primarily provides financial services to military personnel and their families, said in a statement on its website that most of the cards would be changed from MasterCard to Visa by next year.
“As our primary network, this provides us the opportunity to provide more benefits, including the elimination of foreign transaction fees for all USAA Visa credit cards in 2016,” the company said in the statement.
USAA is MasterCard’s biggest debit-card issuer with $26 billion of purchases made on its cards last year, the Wall Street Journal reported, citing the Nilson Report, a Carpinteria, California-based newsletter that tracks the industry.
MasterCard said it is disappointed with the decision. “While we pursued the business, we reached a point where the economics did not make sense for our company and shareholders,” MasterCard said in a statement, according to the Journal.
The financial institution's move is the latest in an ongoing tussle for large portfolios that are sought-after by Visa, MasterCard and American Express Co. However, it is relatively rare for card issuers to drop a network after such a long partnership.
Earlier this year, American Express Co. reportedly ended its 16-year relationship with Costco Wholesale Corp. by switching to Citigroup Inc. as its new card issuer and Visa as its new card network.