vents continue to unfold for Visa USA and MasterCard International following settlements and anti-trust charges against the two big card associations.

In early November 2003, Visa posted a $1.4 billion operating loss for its Fiscal Year 2003, which ended September 30. The deficit resulted from the $2 billion in penalties Visa agreed to pay as part of its April out-of-court settlement of the lawsuit with retailers.

Visa has asked its largest member banks, including Bank One Corp., Wells Fargo & Co. and Bank of America Corp., to pay their membership fees early to make up for the shortfall. While Visa had agreed to pay its part of the damages to Wal-Mart and other merchants over 10 years, generally accepted accounting practices (GAAP) require the company to post the loss in the current fiscal year.

Visa and MasterCard were co-defendants in the retailers' suit as well as in an anti-trust suit that alleged the two associations pressured banks to issue only their branded cards.

Following the settlement in the retailers' suit and fearing defection of smaller banks to other associations, Visa initiated an "exit fee" program in October to prevent its members from ending their Visa agreements and moving to rival card brands MasterCard, American Express or Discover.

On November 11, though, Visa issued a memo to its members stating the exit fees would be imposed only if they switched to the MasterCard brand. Visa contends that by agreeing to allow banks to issue AmEx and Discover cards, it will be satisfying concerns the Department of Justice's Anti-trust Division has about their business practices. MasterCard has been trying to lure debit card customers away from Visa and says Visa's "exit fees" are anti-competitive.

Also in November, MasterCard announced it eliminated 120 jobs, or 3% of its global workforce, in a cost-cutting move. Most of the jobs were located at its Purchase, N.Y. headquarters and St. Louis technology operation. MasterCard said the job cuts are unrelated to the settlement in the retailers' suit, in which it agreed to pay $1 billion in damages.