MasterCard Snags Debit Deal with SunTrust

Updated with Visa statement, latest share prices.

PURCHASE, N.Y. (TheStreet) -- MasterCard (MA) is making progress against rival Visa (V) in the debit card business, announcing another contract win on Thursday.

SunTrust Banks (STI), an Atlanta-based regional institution, agreed to convert its debit card program over to MasterCard from Visa.

Following the conversion, which is expected to take place later this year, SunTrust will issue approximately five million MasterCard debit cards. Financial terms of the agreement weren't disclosed.

In addition to MasterCard debit cards, SunTrust will expand its current commercial card offering to include MasterCard-branded commercial credit cards, the companies said.

SunTrust will continue to offer Visa-branded cards for various consumer and commercial credit card products.

"We are constantly monitoring and evaluating payment options in order to provide our clients with those we believe will offer the best client experience," sais Hugh Gallagher, SunTrust's Senior Vice President for deposit product management. "Partnering with MasterCard to provide access to their first-class system and enhancing our payment offerings is a reflection of that commitment."

The payments business is "highly competitive, so it is not unusual in our industry for client financial institutions to move between payment network providers now and again, especially as the debit category is evolving," Visa said in a statement, addressing the SunTrust move.

"Visa continues to see strong momentum in our debit business and remains committed to delivering the best value to customers through our reliable, secure, and efficient systems," the company added.

MasterCard is playing catch up in the debit card industry, even as market leader Visa makes greater headway. Visa has gained market share this year at MasterCard's expense from bank consolidation and several credit card issuers restructuring their credit card portfolios by either closing accounts or attempting to sell the portfolios as a result of the financial crisis.

For instance, it's been estimated that MasterCard is losing as much as 10% of its U.S. debit volume as JPMorgan Chase (JPM) migrates the Washington Mutual card portfolio over to Visa. JPMorgan uses both Visa and MasterCard payment platforms. Additionally, Citizens Bank, a unit of Royal Bank of Scotland (RBS), over the summer converted to Visa's debit platform, according to analysts.