USAA, one of the largest U.S. issuers of debit and credit cards, is switching to Visa Inc (V.N) from its longtime partner, MasterCard Inc (MA.N), the company said on its website.
"USAA Bank is moving from MasterCard to Visa. As our primary network, this provides us the opportunity to offer more benefits including the elimination of foreign transaction fees for all USAA Visa credit cards in 2016," USAA said in a statement.
The company, based in San Antonio, Texas, is one of the largest U.S. financial institutions. It provides insurance, banking, investments, retirement products and advice to current and former members of the U.S. military and their families.
"Most cards will be changed from MasterCard to Visa throughout 2016," the statement added.
The Wall Street Journal, which first reported news of the switch, said the move was a big blow to MasterCard as USAA was its biggest debit-card issuer with some $26 billion of purchases made on its cards last year.
"While we pursued the business, we reached a point where the economics did not make sense for our company and shareholders," the Wall Street Journal quoted MasterCard as saying.
(Reporting by Sandra Maler in Washington; Editing by Cynthia Osterman)