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Banks remain key clients, but ultimately Visa and MasterCard must serve the interests of major investors. Can they pull that off while warring with merchants over fees?

“Neither MasterCard nor Visa is a technology company. They are networks that rely on technology they and their licensees use to process their products,” says Eric Grover, principal of Minden, Nev.-based consultancy Intrepid Ventures.

Nor should it be forgotten that large banks have a history of developing entities that compete with Visa and MasterCard for transaction volume, such as the ACH. “These types of moves by banks are not unnatural. Even when they owned Visa and MasterCard, banks didn’t run every payment transaction through them,” says Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group.

Digital Transactions, September 1, 2013