BOSTON — A new report from the Aite Group, a research and analysis firm specializing on developments impacting financial service firms, suggests that even raising capital through the financial markets will leave Visa and MasterCard, the two leading card brands, facing increased competition.

According to the report, titled "The Future of Card Networks: Gauging Battle-Readiness for a Post-Visa IPO World," the 2004 decision by the U.S. Department of Justice to repeal the exclusionary rules that prevented Visa and MasterCard's members from using other networks has fundamentally changed the card industry. Now, the major bank networks are suddenly competing directly for issuers' business with American Express and Discover.

"Our analysis suggests that American Express is likely to be a significant threat for Visa and MasterCard, particularly in the United States, which is a key market for them," says Gwenn B?(C)zard, research director for Aite Group and author of this report. "Outside of the United States, a major wildcard that could affect the competitive landscape faced by Visa and MasterCard lies with the strategic directions that will be taken by China UnionPay, JCB and a multitude of regional networks, notably in Europe."