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NatWest to convert all debit cards to Mastercard

NatWest is to convert all of its debit cards to Mastercard, giving the card scheme a massive leg-up in its efforts to break the UK dominance of rival Visa.

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NatWest to convert all debit cards to Mastercard

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

The agreement includes all NatWest Group brands: NatWest, Royal Bank of Scotland, Ulster Bank and Coutts, totalling 16 million cards.

The deal demonstrates Mastercard’s drive to increase the issuance of its debit cards across the UK and Ireland, extending its coverage to approximately one in three of all consumer debit cards in circulation by banks in the UK and one in four in Ireland, once card conversions are complete. NatWest joins Santander, First Direct and Monzo in the Mastercard debit stable.

Across Europe, almost 200 million consumers now use Debit Mastercard to pay at 43 million locations instore, online and in-app, but Visa has long held the trump card in UK debit card issuance.

Salim Secretary, head of payment schemes and partnerships, NatWest says: “For the last year we have been extensively considering how we develop more tailored payment options for our customers. As part of this we will be extending our existing relationship with Mastercard beyond credit cards and into debit payments. We believe this partnership will enable us to offer more tailored payment options to our customers however they wish to pay - whether in store, online or via mobile devices.”

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Comments: (2)

A Finextra member 

While this conversion may "give the card scheme a massive leg-up in its efforts to break the UK dominance of rival Visa", it does little to improve competion or result in lower card acceptance costs for merchants.

While the interchange fee regulation caps fees at 0.2% for debit cards, the Mastercard card scheme fees are significantly higher than those of Visa so will result in much higher costs for merchants - and ultimately consumers. This is not good news.

Also, as the interchange fees are capped, there is little incentive for card issuers to switch brands as their income remains the same - unless a 'behind the scene' deal has been done to sweeten the deal - which would (in effect) be contrary to the anti-circumvention clause of the IFR.

The Payments Regulator should look at the deal closely.

Hitesh Thakkar

Hitesh Thakkar Technology Evangelist (Financial Technology) at SME - Fintech startups (APAC and Africa)

Is this move by bank is to remove monoploy of single card network by rope in to another one. We know for years that VISA and MC shed lot of money on paper for all those card promotion expanses by sponsoring card and merchant side promotions.

If intent is to be build balance than it's logical corporate decision then MC guys shedding away more dollors to gain market share.

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