MasterCard Inc, apparently for the first time in the segment of debit cards, has signed a contract with Delta Air Lines for building up a nationwide network of lenders who will issue debit cards of co branded Delta Sky Miles which will have Master Card logo embossed in them. As of now Sun Trust Banks Inc. of Atlanta is the only issuer of Delta debit cards. Sky Miles credit cards are being issued by American Express at present.
According to Rob Sheets, SVP of Master Card and heading the merchant relations division, the step taken by Master card is innovative and new which will benefit from the brand name of Delta. He had made this statement to Digital Transaction News.
Delta, based in Atlanta, in the year of 2008 has absorbed Northwest Airlines and is considered as the biggest airlines if passenger count is taken into account.
Sheets have stated that members of Delta`s Sky Miles frequent flier program reside in all the fifty states of the country.
It is comparatively easy to market credit cards nationwide which even small banks can do but marketing debit card nationally is tougher since distribution of debit cards is very much linked with the network of a bank`s branch.
Though a few big banks have emerged in the last twenty years but still none has a formidable presence in every state of the nation. Sheets added saying that they are trying to build an alliance of issuers so that any frequent flier, regardless of the state they reside can access Delta SkyMiles card.
For several years, Tempo Payments Inc .a processor has sold affinity debit cards. According to observers MasterCard-Delta is of a different league altogether for their brand value.
Patricia Hewitt, a market researcher and director of Debit Advisory Service of Mercator Advisory Group Inc. started that she does not have any clue regarding the MasterCard and Delta treaty. According to Patricia it is similar to affinity and the name of a financial institution is tagged to it. According to her it is an interesting proposition as both Delta and Master Card has good brand value.
Sheets said that MasterCard has started to negotiate with prospective issuers but he denied giving their identities. The company is likely to settle for banks having branch networks in Atlanta, Salt Lake City, Cincinnati, Memphis, Detroit, Minneapolis-St. Paul and New York City.
Sheets added saying that they are not sure about the number of institutions that will be needed to implement the plans but they are planning to start with the negotiating process.