In a deal not yet made public, Best Buy is switching from former credit card processing partner Mastercard to Visa.
The change will take effect next year, an unnamed source told Bloomberg News. Citigroup Inc. will remain the card-issuing bank after the move.
Visa CEO Charles W. Scharf alluded to the switch in a Oct. 29 conference call, noting that Visa has “agreed to terms to move a significant consumer credit co-brand from a competitor to Visa,” without naming the new partner.
Best Buy started its rewards-card partnership with Purchase, New York-based MasterCard in 2006. HSBC Holdings Plc, the original issuing bank, sold its U.S. card business to McLean, Virginia-based Capital One Financial Corp. in 2011.
Citigroup agreed last year to take over the Best Buy cards from Capital One, giving the New York-based bank a loan portfolio valued at about $7 billion at the time.
MasterCard’s Jim Issokson said the firm wouldn’t “comment on a rumour,” adding that it has won other partnerships with retailers including Target Corp. and Wal-Mart Stores Inc.
Neither Best Buy nor Foster City – California-based Visa – were available for comment, Bloomberg reported.
Whitepapers
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