MasterCard Hit by Loss of JPMorgan Debit

MasterCard (MA Quote) shares were falling Friday after a report earlier in the day that it was set to lose a large portion of its $59 billion debit portfolio at JPMorgan Chase (JPM Quote) to Visa (V Quote).

The debit accounts were from customers who had checking accounts at failed thrift Washington Mutual, which JPMorgan Chase acquired last year, Bloomberg said, citing two people familiar with the issue.

Bloomberg said the move won't have a material impact on MasterCard's revenue, citing a company spokeswoman.

Macquarie Research analyst John Williams wrote in a note that MasterCard is likely to keep its JPMorgan Chase credit card portfolio and at least a portion of the debit portfolio.

"WaMu represents MasterCard's largest debit portfolio," Williams writes. "[W]e believe that losing the WaMu portfolio is a bigger deal for MasterCard than winning it is for Visa. While this is not a significant loss for MasterCard from a revenue and profitability perspective (we believe that the annualized per share impact of the switch is no more than [10 cents a share]), it is a fairly substantial blow for the company's debit platform."

The move could be particularly poignant as consumers rely less on credit cards as the recession continues. New legislation signed into law on Friday by President Barack Obama will also hamper the ability of banks, including Bank of America (BAC Quote), Citigroup (C Quote) and JPMorgan Chase, to raise interest fees and other lending terms on borrower credit cards -- making the credit card business that much more difficult.