Magazine article American Banker

AMEX Chief Defends His '96 Pitch to Banks

Magazine article American Banker

AMEX Chief Defends His '96 Pitch to Banks

Article excerpt

American Express Co.'s Harvey Golub wrapped up his testimony Thursday in the government's antitrust case against Visa and MasterCard by defending his motives for seeking partnerships with banks. A Visa attorney, Stephen Bomse, spent a good part of the morning dissecting a speech that Mr. Golub, chairman and chief executive officer of American Express, gave at an industry conference four years ago in Atlanta. This speech has provided rich fodder for the bank card associations' attacks on Amex during the trial, which began June 12. The speech was Mr. Golub's first invitation to banks to issue Amex cards to their customers, and it laid out in detail how they would benefit from such an arrangement. But any U.S. bank that accepted Mr. Golub's offer would violate Visa and MasterCard rules. The associations say the speech supports their contention that Amex has tried to divide them and to cherry-pick their best bank members. In court, Mr. Golub said it had not been his intention to drive a wedge between Visa and MasterCard, but added, "I don't care if a wedge is created or not. I just wanted banks to work with me." Judge Barbara S. Jones, who is presiding over the trial in U.S. District Court in New York, intervened several times to stem the sparring between Mr. Golub and Mr. Bomse, and indicated that she is not impressed with the associations' argument that Amex wanted to come between them. "Driving a wedge is colorful," she told Mr. Bomse, "but it is not very helpful." Mr. Bomse zeroed in on several points Mr. Golub made in his speech: his call for banks to stop supporting the associations' development of corporate and purchasing card systems; his plea for banks to demand higher merchant fees; and his urging that banks stop supporting the associations' high-priced sponsorships of sporting events. In the speech, Mr. Golub said: "I would question how it is in my interest for Visa to support a sports league or other organization by providing $20 million or $25 million as an incentive to issue cobranded cards. …

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