Magazine article Marketing

First Access, Then the World

Magazine article Marketing

First Access, Then the World

Article excerpt

Mastercard's bid for Access is the opening move in a bid to get back on the global track after a 70s licensing-deal derailment - but it won't be an easy ride.

Mastercard began talks to buy 'flexible friend' Access last Friday, with success in the deal crucial to the credit card company's global aspirations.

Mastercard, although well known in the US, has a low profile in the UK and much of Europe. Its arch rival Visa, though, has steadfastly promoted its name across the globe since its 60s launch. The result is that there are several million more Visa than Mastercard credit cards in circulation. And the amount spent on Visa cards is much higher than that spent on its rival (see table).

Mastercard is now attempting to redress the problem in the UK. This is partly due to increased competition in what is the world's second largest credit card market. But also, say industry observers, it is because Mastercard wants to benefit from the burgeoning market for co-branded credit cards.

In the US, nearly half Mastercard's business comes from such deals. And while the UK has seen a lot of activity in this area - witness the launch of the GM Card from Vauxhall - Mastercard believes the market is still underdeveloped. A stronger brand would help it win more of these deals over rival Visa.

Mastercard, however, has caused itself a problem by striking licensing deals across Europe, resulting in its brand being overshadowed by that of others.

One such licensing deal Mastercard is currently trying to extricate itself from is that involving Access. In the 70s, Mastercard gave four high street banks, Lloyds, NatWest, Midland and Royal Bank of Scotland, permission to brand their Mastercard credit cards under the Access name to beat off competition from Barclaycard.

Not such a flexible Friend

Since that deal was struck, Mastercard has appeared on every Access card. But its logo has always been much smaller than that of Access and it has not benefited from any of the [pounds]50m advertising the 'flexible friend' has received.

Based on this evidence, it's not difficult to see why Mastercard's presence has never really been understood by much of the public.

"Privately the top executives at Mastercard believe their strategy should have been just to promote one brand, like Visa did, across the globe," says one source. "They accept that by handing out exclusive licenses across Europe they have made a mistake."

The solution in the UK is for Mastercard to buy Access so it can remove what has accidentally become a competitor - an objective likely to be achieved through a gradual rebranding exercise. …

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