Three months after selling its electronic-banking-services division to Visa International, U.S. Order has recast its strategy for competing in the interactive-services industry.
The company has organized itself around four business lines: administrative services for Visa member banks, off-the-shelf applications for banks, hardware, and customized applications for the cable and telecommunications industries.
"The overarching thought behind the reorganization is to make Visa Interactive as successful as possible," said John C. Backus, president and chief operating officer at U.S. Order. Visa Interactive is the business unit responsible for the card association's remote-service offerings, with the former U.S. Order banking and bill-paying unit at its core.
U.S. Order also plans to partner with telephone and cable providers to facilitate the financial industry's entry into home banking, Mr. Backus said.
The Hemdon, Va., company is nearing the long-awaited rollout of Phoneplus, a screen-based telephone. It will succeed the Scanfone, which was used over the last two to three years by over 20,000 customers.
Several hundred of the Scanfone users, situated in 15 states, are testing Phoneplus, which is scheduled to be released in mid-February. The phone, which has a card reader and Caller ID capability, will be sold for $150 through Visa banks.
One of the U.S. Order offerings, called "smart applications," will provide interactive content for the screen phone, such as news updates, shopping, directory assistance, electronic mail, and sports scores. This service was developed to respond to customer desires to do more than just home banking, said Mr. Backus.
The company is also developing back-office operations that can be branded by banks. These "smart services" include customer service, telemarketing, and distribution. The idea is to help banks get started in home banking quickly by relieving them from the operational details to concentrate on marketing, said Mr. Backus.
"Most of the 30-plus banks signed up for electronic banking through Visa Interactive will benefit from using our implementation and support services," said Mr. Backus.
Meanwhile, U.S. Order views the telecommunications and cable industries as distribution media, and will work with them on customized screen phone applications if desired. They have an interest in pushing screen phones, said Mr. Backus, adding that four major telephone companies are already behind the PhonePlus.
The telephone companies want to be involved because many of their new network services, such as caller ID and call disposition, work best with a display screen. In call disposition, users can route incoming calls while they are already conversing, using the call-waiting function and a screen phone.
Cable television companies are a natural for distributing screen phones because they are already putting interactive devices in the field, said Mr. Backus. He thinks cable providers will view screen phones as a way of competing with telephone companies.
Mr. Backus referred to this as "getting the camel's nose into the tent." If cable companies can get customers to use smart phones for interactive services, it won't be such a leap into die broader world of interactive television, he said.
In 1995, PhonePlus screen phones will be available primarily through banks. Mr. Backus sees telephone companies getting active in 1996, followed by the cable companies in 1997.
Although U.S. Order is emphasizing the screen phone for home banking, Visa Interactive is not ruling out other devices. U.S. Order's thinking, shared by many bankers but disputed by those partial to more advanced personal computers, is that phones will be the "driving access mechanism for the next several years," said Mr. Backus.
Screen phone access should take off when smart cards are more widely deployed - in three to five years, the executive predicted. Enhanced with computer-chip memories and their added security, smart cards can hold cash value, making phones function more like automated teller machines, he said.
