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Mastercard (MA), DoorDash & Chase to Offer Rewards Credit Card

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Mastercard Incorporated (MA - Free Report) launching a credit card with co-brand card issuer Chase, owned by JPMorgan Chase & Co. (JPM - Free Report) , and food ordering platform DoorDash, Inc. (DASH - Free Report) is a good sign for MA’s growing network. The partnership will likely enable DoorDash customers to earn rewards and benefits after making purchases on and off the platform.

The deal will bring the first ever DoorDash credit card to the market and strengthen the partnership among MA, DASH and JPM. Since January 2020, the three companies have combined their works to offer DashPass benefits on some Chase Mastercard credit cards. In April 2021, Mastercard and DoorDash partnered to launch some card benefits.

The new DoorDash Rewards Mastercard is expected to attract and retain customers amid the growing competition in the food delivery space. The perks and benefits to be provided by the co-branded World Elite Mastercard are expected to enhance customer frequency. Offering a brand-new card, rather than just arranging perks for the existing cardholders can give the partnership an edge over the competitors.

Similar steps are being taken by the competitors in the market. Online food ordering company Grubhub commenced offering corporate pay cards with Visa Inc. (V - Free Report) that enables employees with Corporate Accounts to order foods from restaurants.

Mastercard’s deal with DoorDash and JPMorgan’s Chase comes at a time when investors are feeling a bit worried about the recently proposed bill by the Congress to enhance competition within credit card processing firms. The Credit Card Competition Act of 2022 is expected to reduce the dominance of Mastercard and Visa in the processing space and save money for merchants and consumers. This can reduce swipe fees for V and MA, putting pressure on their margins.

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