As the government moves to remedy antitrust concerns regarding Visa USA, Visa International and MasterCard International, market observers are debating whether securitization among smaller players would increase, while Visa and MasterCard could lose market share.

Recent developments in the Department of Justice antitrust lawsuit against Visa and MasterCard include the government wanting financial institutions who sit on the boards of either company to issue 100% of new cards solely in the brand for which they govern. For instance, because Citigroup sits on MasterCard's board, it would only be able to issue new cards bearing the MasterCard logo.

Banks may choose to issue cards from both companies, as well as cards from American Express Co. and Morgan Stanley Dean Witter's Discover unit, if they do not sit on the governing boards of Visa or MasterCard.

If the government succeeds, overall market share for Discover and American Express securities could increase, though observers say it would have to increase substantially for anyone to take notice.

With competition already fierce, significant growth from any one company would have to cut into another's. "So it's hard to argue it would be a new avenue for growth not at somebody else's expense," said one source following the trial. "You have Household International new issues, private-label cards from retailers and their own Visa/MasterCard; they run separate-type securitization programs. I would imagine that's the way it would go if it ever led to significant growth."

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