Overshadowed by last week's announcement of a new chief executive at Visa was word that the card association had concluded an agreement to purchase the Plus automated teller machine network.
The deal, to be sealed formally today in Denver, could have far-reaching implications for the fast-growing and increasingly critical debit portion of Visa's business.
While Visa U.S.A. has long had close ties to Plus System Inc., and has owned a one-third interest since 1987, the outright acquisition will allow Visa to integrate ATM services more fully with programs like interlink and Visa Check, which deduct payments directly from cardholders' transaction accounts.
Integrated Debit Strategy
Charles T. Russell, the Visa International chief executive officer who will step aside at yearend in favor of U.S. Bancorp vice chairman Edmund P. Jensen, called the Plus acquisition "the final link in the Visa integrated debit strategy."
D. Dale Browning, the Plus president who will be moving to Visa as a senior consultant, said the arrangement will give consumers more access to cash in the U.S. and internationally and "will help to assure an integrated debit card strategy for all of our member financial institutions."
Underlining the strategy and reinforcing Visa's resolve to become dominant with debit, Wesley C. Tallman will succeed Mr. Browning as president and chief executive officer of Plus.
Considerable Progress
Mr. Tallman, 50, executive vice president of product and market development for both Visa U.S.A. and Visa International, came to Visa in 1989 with a mandate to build a debit card empire. He is well on his way, with 23 million Interlink and 13 million Visa Check cards in circulation, and is projecting 220 million debit cards worldwide by the end of 1995.
Visa currently has 157 million cards in the United States and 318 million worldwide, giving it about a 50% advantage over MasterCard International.
Mr. Tallman takes charge of an automated teller network of 102,000 machines in 40 countries, accessible with 200-million cards -- most of them credit cards -- that carry the Plus logo. Cirrus System Inc., the competitor that MasterCard International has owned since 1988, connects 135,000 ATMs in 48 countries.
Cobranding Effort
In an interview last week, Mr. Tallman said at least one aspect of the integrated strategy is well under way: Visa will cobrand all ATMs with the Plus and Visa logos by 1996. To date, 64% of the 160,000 machines in Visa's global network display both signs.
Beyond that, Plus and Visa have embarked on a three-year transition period to set future strategies and goals, including a more consistent level of cash-withdrawal service at ATMs worldwide.
"We want to be sure all the Visa debit pieces are managed and come together over time," said Mr. Tallman.
The Visa brand name is likely to emerge even more prominent, through the ATM cobranding and in the point-of-sale debit efforts known as Interlink in the United States and Electron overseas. Visa has already created a strong identity -- Visa Check -- for the off-line type of transaction that is authorized in the same way as a Visa credit card payment.
Unifying Symbols
Mr. Tallman did not specify when or how the Plus name might be deemphasized, but in addressing branding questions he is onto an issue that MasterCard has already settled. Interlocking circles are the common theme in MasterCard's three logos: the conventional MasterCard; Cirrus on ATM cards; and Maestro on the on-line debit alternative to Visa's Interlink.
"Our long-term goal is to consolidate brands and position Visa as the primary brand globally," Mr. Tallman said. "Other brands will have to migrate toward [Visa], not the other way around."
Mr. Tallman said consumers have grasped the differences and subtleties among the current proliferation of brands. "The positioning of the specific products has not been readily understood in the banking community, and I have been spending a lot of time on educating our members," he said.
Well aware that the burdens on his time are going up, he added, "It is likely that as the [debit] jobs get bigger, someone else will fill these roles. For now, we felt it was important to give one person accountability for all the aspects" of debit.
Mr. Tallman said the Plus-Visa integration will be a joint effort of the two organizations' managements and the 24-member Plus board, which is headed by Chase Manhattan Bank vice president Stephen Hirsch.
There will be none of the "social issues" that can get in the way of typical mergers. The banks and bankers that formed Plus in 1982 were Visa members, led by Mr. Browning, who wanted to prevent Visa from dictating the terms of nationwide ATM-sharing arrangements. (The MasterCard bankers who formed Cirrus, led by current MasterCard president Alex W. Hart, then of First Interstate Bancorp, had the same concerns.)
Mr. Tallman himself spent 20 years at Chase Lincoln First Bank, Chase Manhattan Corp.'s Rochester, N.Y., subsidiary, and was one of the original Plus organizers.
He has had a close personal and professional relationship with Mr. Browning and with Denny D. Dumler, 52, Mr. Browning's longtime credit card colleague at Colorado National Bank, on whom Mr. Tallman will rely as chief operating officer of Plus.
The operation will remain in Denver, where it began in the 1970s as a regional sharing program of Colorado National Bankshares' Rocky Mountain BankCard unit.
Mr. Tallman said Plus "adds capability, functions, and features in ATM services and gateways [connections to other networks] that enhance Visa. We will not be stripping it down," and the 62 Plus staff positions are not in danger.
"I have known Wes forever," Mr. Browning said. "He handled himself beautifully in putting this deal together. He has a true strategic vision, and doesn't confuse the long-term issues with the short-term issues."
Complex Arrangement
Details have not been disclosed about the exact structure of the transaction and how much Visa is paying the 64 banks that own equity in Plus. The deal's complexity may be indicated by its long time in coming.
Mr. Tallman said he has spent four years in discussions with the Plus board. "They had to be satisfied that Visa was committed to a broad-based debit strategy," the Visa executive said.
"I looked at and evaluated every alternative for Plus," said Mr. Browning. "It took a long time to arrive at the agreement with Visa, but we have maximized he benefits to the members, assured job security and career opportunities for the employees, and Plus will be a catalyst to Visa's integration of debit strategies."
For Mr. Browning, 56, the move to Visa as senior consultant marks his second career transition within a year. He stepped down as vice chairman of Colorado National Bankshares, and from senior jobs at Colorado National Bank and Rocky Mountain BankCard, after Minneapolis-based First Bank System Inc. announced its acquisition of those affiliated companies.
Since last January, Mr. Browning has devoted all his energies to Plus. He described his new role as "very much full time."
Mr. Tallman said he would be relying on Mr. Browning, a highly regarded card industry veteran, for "other things besides debit."
Mr. Tallman has already established a clear debit payment course: Visa Check is "the primary product" for technological reasons. As an off-line card, it is usable in all 10.5 million Visa merchant locations, and 70% of consumers qualify for it.
"If there were an inexpensive, high-quality telephone network everywhere in the world, then Interlink would be the primary product," Mr. Tallman said.
