Getting into 'Relationships.' (Visa U.S.A., Carl Pascarella, Business Relationships) (30 Years of Bank Credit Cards) (Interview)

American Banker, September 9, 1994 | Go to article overview

Getting into 'Relationships.' (Visa U.S.A., Carl Pascarella, Business Relationships) (30 Years of Bank Credit Cards) (Interview)


CARL PASCARELLA, 51, became president of Visa U.S.A. in September 1993, after about a decade as head of the association's Asia-Pacific region. He was pan of a wave of top-management changes that soon thereafter included the appointment of Edmund Jensen as chief executive of Visa International

Mr. Pascarella, like Mr. Jensen and others who have held Visa's top jobs, also brought line banking experience. His previous employers included Bankers Trust Co. and the defunct Crocker National Bank of San Francisco.

In this recent interview with American Banker senior editor Jeffrey Kutler, Mr. Pascarella looked ahead at the way banks will manage their customer relationships, the role of Visa in those relationships, and the new technologies that might help them.

YOU HAVE MENTIONED MANY TIMES THAT THE NOTION OF "RELATIONSHIP" IS CRUCIAL TO TIlE BANK CARD BUSINESS. THIS HAS NOT ALWAYS BEEN SO. WHAT CHANGED?

Nothing has really changed about the credit card business. It was not built on relationships, but rather on brand identity and mass marketing.

Banks are feeling more and more pressure today on their core businesses. People are demanding more. Technology is moving forward, and customers want to do business when and how they want to transact it.

Many banks have bill payment services, but they are often sneaker brigades. They are peopleintensive, they make errors once in a while. But when customers rank their services, they say, don't take this one away. Smaller banks may be able to do this better than the big, bureaucratic organizations. They can do it on a smaller scale and with relatively fewer dollars committed.

Driving Visa's involvement is that for a long time we were chugging along with a nonrelationship product. The credit card is a brand product, sold by mass mailing, and produces revenue based on fees and interest rates. But a whole other side of banking is based on demand deposit accounts and business accounts--on relationships. We are getting involved because the consumers are demanding more. Automated teller machines were a first step, allowing customers to use a card and get better service than in a branch.

Now we have personal computers and PDAs [personal digital assistants], creating a whole lot of interest in new types of delivery mechanisms. When the market is ready, we had better be ready. Because if we fall behind the curve, there is nothing to keep the retailers, processors like Nabanco, or anybody else from providing that service. The card or the banking relationship isn't completely necessary to transact that business.

We have a telecommunications infrastructure, and perhaps the access device, in the form of a card. But the whole role of our business, what we can provide, is going to change. The question we face is, what does the bank need to solidify its relationship with the customer, and what role are we going to play in the process?

WHAT DOES ALL THIS SAY ABOUT THE TRADITIONAL CREDIT CARD BUSINESS AND THE WAY YOU APPROACH IT? IS IT MATURE, AND LESS IN NEED OF YOUR ATTENTIONS AS THESE OTHER THiNGS BREAK?

There is still progress to be made by the credit card. We gauge ourselves against PCE-- personal consumption expenditures and there is still a lot of them

to capture. There are various kinds of taxes, fines, health care, recurring payments not paid by check, which we are not involved much in.

Also, look at demographics. Bank cards' penetration in the United States is something like 73% of households. In minority groups--blacks, Hispanics, Asians--it's more like 23% to 25%. Generation X is around 35%. There is a lot we can do to penetrate markets, including those seen as not creditworthy, with a secured card.

I don't think we are saturated. We haven't done a good job, as an association, to help banks focus their products or advertising or promotions for the untapped opportunities that are out there. …

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