ABA Banking Journal - January 2008 - (Page 28) CARD STRATEGIES Now that they’re public… Industry experts make sense of the MasterCard and Visa IPO outcomes. Read between the lines for what’s in store for payments A t a time when credit cards are still a big source of bank revenue despite waning consumer confidence, a vexed Congress, and other pressures, some in the industry are looking at a public MasterCard and soon-to-follow Visa and wondering if, and how, such a move could come back to haunt bank card issuers in the long run. Competitive trouble down the road for issuers, some speculate, might come in the form of new distribution channels for cards, new card features, or deals that kill the luster on profitable classic cards, or make them look a little less inviting. Quite aside from today’s economic picture, there is the matter of how the payments industry will change and what sort of customer segments and “form factors” (e.g., chip cards, mobile By Lauren Bielski, senior editor phones) will emerge as winners over the next decade. Not that anyone is citing any activities or announcements from either MasterCard or Visa portending, in effect, a compromise of the existing bank card system. Quite the contrary. Tim Mills, senior vice-president at Atlanta-based Global Concepts Payment Systems Consulting, has an optimistic read on both deals. “MasterCard or Visa won’t do anything to upset the relationship with card-issuing banks,” says Mills. “It wouldn’t make sense and it would ruin a very viable model that they’ve built their businesses on—nobody wants to cannibalize that.” Mills was not alone, among the group of card experts whom ABA BJ contacted, who said, in effect, that MasterCard’s and Visa’s structural changes will not change either operating model to such an extent that it will damage bank card issuers. “Competition 28 JANUARY 2008/ABA BANKING JOURNAL www.ababj.com/subscribe.html http://www.visa.com http://www.mastercard.com http://www.mastercard.com http://www.visa.com http://www.global-concepts.com/ http://www.ababj.com/subscribe.html
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