Diners Club International has won International Business Machines Corp.'s corporate card business outside the United States.
The Citicorp subsidiary announced the signing of the contract, one of the largest and most coveted of its kind, this week after a yearlong bidding process. It is a significant step forward for a card issuer that has had trouble maintaining its market share and recently went through a management shake-up.
The company has shared the international portion of IBM's travel and entertainment card program with American Express Co. - as it continues to do in the United States.
"This is a real coup for Diners Club," said Stan Anderson, president of Anderson & Associates in Denver. "Diners Club has clearly outmaneuvered American Express to capture a major international client."
Chicago-based Diners Club was "thrilled to receive this seven-year contract" and "excited to receive such a long commitment," said Brenda Gaines, executive vice president of corporate sales.
American Express Co., the biggest issuer of corporate cards, was "disappointed not to have been awarded the contract," said Christine Levite, the New York company's director of public affairs.
But she said American Express is "very gratified" it will continue to be "the main corporate card provider in the United States."
Diners' contract makes it the exclusive service provider for Europe, the Asia-Pacific region, and Canada.
IBM has 110,573 employees in the United States and 114,774 overseas.
"It's a great win for Diners Club," said Michael Auriemma, president of Auriemma Consulting Group Inc. in Westbury, N.Y. "They needed to win it to show the market that they are still a competitor."
Diners Club suffered a severe setback in 1993 when it lost the U.S. General Services Administration contract, which it had had for 10 years, to American Express. The deal was estimated at the time to represent 860,000 cardholders and $2 billion of annual volume. The government program now has 1.3 million cardholders.
Mr. Anderson estimated Diners lost 40% of its portfolio with the government switch.
Diners Club was also thrown into turmoil last May when Citicorp removed its chairman and chief executive, Robert H. Rosseau. He had overseen the filing of an antitrust complaint against Visa International in Europe, which sources said embarrassed Citicorp, an influential Visa member.
Diners Club has seven million cardholders and 3.3 million card-accepting merchants worldwide. Business Travel News said Diners had 1.5 million corporate cards at yearend 1995. American Express has 7.7 million.
Diners Club service includes management reports on transactions in more than 60 local currencies in 50 languages, worldwide cash access, travel insurance, global assistance, and access to Diners Club airport and business lounges.
