Wells Fargo & Co. said Monday that it will stop using MasterCard International's Cirrus network for processing automated teller machine transactions and will switch to Visa U.S.A.'s Plus.
The San Francisco bank also said in a press release that it had renewed its contract with Visa as its primary brand for debit and credit card transactions and had "expanded its commitment to include Visa's Interlink network for retail transactions with merchants" when the customer uses a PIN.
Wells refused to discuss or elaborate on the release.
What was left unclear was how the new arrangement would affect its PIN debit and ATM processing contract with Concord EFS Inc., whose Star Systems network competes directly with Interlink in PIN debit.
"We are still in negotiations with Wells Fargo regarding their contract renewal," a spokesman for Concord wrote in an e-mail. The Memphis processor would not comment further.
MasterCard did not return calls. A Visa spokesman said, "We're pleased that Wells Fargo has awarded Visa the opportunity to provide its customers a comprehensive payment card solution, including credit, commercial, and debit."
Concord has been under a microscope for months because of First Data Corp.'s plan to buy it. That transaction is receiving close scrutiny from the Justice Department. On Monday, Concord's stock fell, as Wall Street concluded that the Wells announcement could not possibly bode well for Star, which recently has lost two large bank customers, U.S. Bancorp and Wachovia Corp.
John Kraft, an analyst at D.A. Davidson & Co., who covers Concord, did not mince words in giving his opinion: "Star is gone," he said in a telephone interview Monday. "Star is no longer going to be the PIN-based debit processing route for Wells Fargo. It's going to be replaced with Interlink."
Shareholders of First Data and Concord are expected vote on the deal in separate meetings on Oct. 28, by which time they are expected to have learned whether the Justice Department will seek to have First Data divest the NYCE network or will put other conditions on the acquisition.
In August, when Wachovia said it was switching from Star to Interlink, analysts speculated that the Charlotte bank's decision could affect First Data's planned purchase of Concord. Monday's announcement by Wells revived such talk.
"How many banks can Concord lose before First Data walks?" asked Robert J. Dodd, an analyst at Regions Financial Corp.'s Morgan Keegan & Co. in Memphis
Mr. Kraft of D.A. Davidson offered another possibility: "First Data is going to go back to Concord and say, 'Look, we're not going to give you 4 cents per share. We'll give you something less.' " The deal calls for First Data to give 0.4 of its common shares to Concord stockholders for each of their shares.
Sue Riedman, a First Data spokeswoman, said it had built into the deal the possibility that Concord could lose some contracts that are up for renewal.
"We knew there were some clients that could be at risk, and we took that into consideration when we did the deal," she said. "We still remain committed to the deal, and that has not changed."
