Visa's strategic response to American Express Co.'s recent appeals to member banks has been measured and low-key.
But that hasn't been the case in the tactical battle for card-accepting merchants.
The San Francisco-based card association began running ads this week in The Wall Street Journal promoting free software that it says will calculate how much retailers could save by accepting Visa instead of American Express.
Visa is trying to capitalize on the claim in a recent speech by American Express chairman Harvey Golub that he could make card issuers more money because American Express' merchant fees are higher.
"We decided to take Harvey to task because he was talking from both sides of his mouth," said Thomas C. Edwards, Visa's senior vice president of travel and entertainment marketing.
At the National Restaurant Association Exposition in Chicago this week, Visa unveiled a digital clock showing how much U.S. restaurants as a group lose each second - Visa says $6.60 - by paying American Express' transaction fees, known as discount rates.
Restaurateurs are "more focused on serving food and not on the bottom- line profit," Mr. Edwards said. The "Lost Profits Clock" underlines the financial impact, he said.
On average, merchants pay 2.75% of amounts charged to American Express cards, said Bear, Stearns & Co. analyst Susan L. Roth. The average bank card discount is about 2%.
In its ad Visa makes comparisons based on 2.85% for American Express and 1.60% for itself. A merchant with $9 million of sales on American Express could save $112,500 if it did the same business on Visa, under that comparison, Visa said. The software also makes comparisons to other cards.
"Harvey's speech hit a raw nerve," said American Express spokesman Marcos Rada. "His proposal must have threatened Visa because they are once again trying to confuse merchants."
American Express cardholders spend twice as much on average per visit as bank card users, Mr. Rada said. In addition, American Express is the largest issuer of corporate cards, which many customers must use for travel and entertainment. "Merchants know they should accept the card," Mr. Rada said.
He added that merchants are subject to bank fees other than the discount for using MasterCard or Visa, whereas the American Express rate is inclusive. "The gap between the two rates is much more narrow than they suggest," he said.
