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Visa International Plans Makeover

September 8, 1999

SAN JOSE, Calif. (AP) _ Visa International plans to cede some control over what products and services it offers and charges members in a move that could give those financial organizations greater input into rapid changes taking place in the credit card industry.

The association, which controls the Visa logo put on about 60 percent of all credit cards issued worldwide, is considering allowing its six subsidiaries around the globe to choose from a menu of debit and credit card systems and services that meet the needs of members in a particular region.

Visa International has been under pressure to cut its fees and loosen rules on how members use the logo and offer services as banks and other financial services organizations try to increase profits in the highly competitive credit card industry. Citigroup last year defected to Visa competitor MasterCard, in part because Visa USA refused to allow it to move the logo to the back of the card.

If Visa International’s board of directors approves the proposed changes in a meeting Sept. 24, it could be the first in a series of steps to allow such large members as Bank One Corp.’s First USA credit card subsidiary greater flexibility in how they market Visa brand products, said industry analyst Spencer Zahn, president of research firm Zahn & Associates in Philadelphia.

``Various banks in the past few years have wanted to do more individual things for themselves, and this could be a very clear indication that the doors are open for people to give greater input,″ Zahn said Wednesday. ``The world is dramatically changing in terms of electronic commerce, stored valued cards and the like. Decisions about how to proceed should be open as we close out this century and start the new one.″

Preliminary plans call for Visa International to offer its 21,000 members basic services such as financing and global marketing while leaving the regional groups free to pick and choose more extensive offerings _ all at varying price levels.

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