Plus: The Evolution of a National Electronic Network
Welch, Randy, American Banker
DENVER -- Colorado seems as unlikely headquarters for a company leading the way into the new world of electronic banking. The Plus System, however, was born and bred in this Western city, and the national electronic network appears to be gathering momentum as the world of banking opens up. D. Dale Browning, the tall, 47-year-old Kansan who created Plus, is a sought-after speaker and adviser on electronic banking, and he spelled out the history of Plus and his views on the future in an interview with the American Banker.
In fact, Mr. Browning wears several hats. He is a senior vice president at Colorado National Bank of Denver, lead bank of the state's third largest holding company. He is president of Rocky Mountain BankCard System, the predecessor to Plus, which is owned by three Colorado banks. He is president of Plus System Inc., which is owned by 35 banks in the U.S. and Canada. And, after pouring out nearly the last cup of coffee from pot during the morning interview, he ripped open a new package for the machine and became the company coffee maker. That tidy attention to detail may be symbolic.
Mr. Browning explained that he became involved in the bank card business when he took over credit card operations for Colorado National Bank in November 1968. Colorado National had been offered the license for BancAmericard in the area in 1966 and bought a local retail card company to begin operations. The ex-retailers running the operation, Mr. Browning explained gently, "were marketers, not control-oriented." Credit was extended to unreliable customers, collections were snarled, inquiries went unanswered for months, and the operation was losing "substantial amounts," Mr. Browning said, when he was asked to take over.
He came to Colorado National from Continental Illinois National Bank and Trust Co. in Chicago in 1967 to run consumer activities. He turned the credit card operations into a profit center between November 1968 and May 1969, but then he found new competition. United Bank and First Interstate, the state's two largest bank holding companies, had joined in issuing MasterCards. Central Bank, fourth in the state, wanted to join in issuing BancAmericards, so Colorado National and Central joined to create Rocky Mountain BankCard System in 1969. Seven years later, Affiliated Bankshares, fifth largest in the state, bought a 10% interest in the local system, and the card name was changed to Visa.
By then, new hurdles had come up. Colorado National had already decided it wanted to position itself as a processor of transactions for other banks in the state, and spent $3 million to rewrite software so it could do so, Mr. Browning recalled. At the same time, the "duality" debate was raging -- the issue of whether a bank could issue both Visa and MasterCards. The Department to Justice settled the issue by declaring banks could issue both.
"We knew United and the others would since Visas," Mr. Browning said. "We wanted some product differention. Sok we protected the name 'Plus,' and put it one our cards and those of other members [of Colorado National's network]. At that time, we did not know what Plus was, but we knew there would be a product around that name."
Clearly, the new banking environment will breed new life forms. A product name without a product is one that deserves attention.
By 1978, Rocky Mountain BankCard had decided Plus should include shared automated teller machines, and the system spent another $3 million on switching software and hardware. The company needed state legislation to allow off-site ATMs and got it -- but the bill declared such sharing must include everyone that wanted in.
So Rocky Mountain BankCard threw open its system to all the banks that wanted to join, and the response, Mr. Browning said, "was unbelievable." The 20 Colorado member banks were joined by 70 new ones in Colorado, New Mexico, and Wyoming during the first four months through early 1979, and then the system began to expand in other Western states. …