Does Online Debit Threaten Credit Growth?

While Maestro International, which is co-owned by MasterCard International and its European affiliate Europay, is working to create global interoperability of online Maestro debit transactions on the Internet, Visa International says in a prepared statement that it is exploring several undisclosed authentication concepts for both debit and credit Internet transactions. And Visa says U.S. regional network efforts to develop debit solutions are not a threat to Visa's share of card transactions initiated on the Internet. Other observers, however, say that while Visa and MasterCard do not stand to lose shares of Internet credit card transactions, they do face potential growth problems as other card organizations gain interest from Internet shoppers who lack credit or offline debit cards. "If Visa and MasterCard are slow to bring online debit solutions to market for the Internet, they may be locked out," says Tony Hayes, vice president of business services at Dove Consulting, Boston. "They should be worried because it's a potential threat. But whether it is a real threat is an open question."