Westpac sidelines MasterCard

Westpac has established a preferred credit card relationship with Visa and will issue Visa cards to most customers applying for a new credit card from October.

At the moment, Westpac issues MasterCard and Visa credit cards. Customers with MasterCard cards will be able to renew them when they expire, but anyone applying for a new personal or business credit card after October will receive a Visa card.

The preferred relationship does not apply to debit cards; Westpac will continue to issue MasterCard and Visa debit cards. Westpac will also continue to issue MasterCard commercial cards.

Nor does the preference apply to Westpac's high-end credit cards - Altitude and Earth Black - which are issued as MasterCard and American Express companion cards.

The Black cards were launched in May. They offer Westpac's highest earn rate for reward points: 1.25 points per dollar spent using an Altitude MasterCard at any Australian merchant; three points per dollar spent using an Altitude MasterCard at any merchant overseas; and three points for every dollar spent using an Altitude American Express card at any Australian or overseas merchant.

Black points are uncapped, and the card also comes with a concierge service, complimentary overseas travel insurance and a range of travel privileges.

The move from dual-card issuance to a preferred relationship with Visa is part of Westpac's simplification project. Earlier this year, Westpac's Australian financial services chief executive, Brian Hartzer, said he was looking for a "dramatic simplification in the product set".

Westpac's general manager of business improvement and program delivery, Rachel Slade, said the bank had 350 products in its system, and 220 of them were on sale. But just 22 products account of 90 per cent of all new openings.

Slade said: "We have 24 credit cards. We would like to get that down to three - a low rate card, a low fee card and a rewards card."

Slade said there were a number of benefits to be had from product simplification. It would ease the bank's regulatory burden. It would make the training of frontline staff easier and it would improve service levels.

She said that if employees misunderstood what products were on offer, customers would be confused and the bank would miss sales. "And, if we get it right, we will get more productivity in the process side of things," she said.

ANZ has had a long-standing preferred relationship with Visa, although it issues both Visa and MasterCard cards. Commonwealth Bank entered into a preferred relationship with MasterCard in 2009 and this arrangement is still in place. National Australia Bank is a dual-card issuer.