Magazine article American Banker

Visa Chief Affirms Targets despite Recession, Rivals

Magazine article American Banker

Visa Chief Affirms Targets despite Recession, Rivals

Article excerpt

Byline: Maria Aspan

Joseph W. Saunders, Visa Inc.'s chairman and chief executive officer, affirmed his company's long-term guidance Thursday, despite the difficult macroecononic environment and a changing competitive landscape.

"I'm planning for the worst," Mr. Saunders told investors Thursday morning at a New York conference held by Goldman Sachs Group Inc. But regardless of where the economy "bottoms out, our draconian, worst-case assumptions put us in the position of delivering on our earnings per share and our operating margins."

He also addressed the changing competitive field for Visa and other payments networks, especially in the midst of issuer consolidation.

Visa won the debit card portfolio of Royal Bank of Scotland Group PLC and its U.S. banking arm, Citizens Financial Group, from MasterCard Inc. this year, and Mr. Saunders pronounced himself "pretty comfortable with how things have gone" in the continuing consolidation of Visa's current and potential issuing partners. But he indicated that Visa would not defend all its partnerships at any cost.

"In the old days, MasterCard and Visa used to fight for share without much regard for what it did for them," he said in response to an analyst question. "MasterCard can't do that any longer, and I'm not going to." But "rest assured," he said, "that if I lose any business, then whoever gets the business is losing money with it. It's a desperation play."

A spokesman for MasterCard said the company "is - and has long been - focused on profitable business ... rather than growing share for share's sake. As such, we don't focus on share as a key metric to measure the success of our business. It is understandable that others have come around to this way of thinking."

Mr. Saunders also dismissed persistent speculation about the possibility of a major issuer's entering the network business directly and competing against Visa. …

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