Visa and MasterCard are gearing up for platinum wars.
Both bank-owned associations are poised to unveil platinum cards, most likely in Latin America first.
They are going after the very top of the consumer market and trying to cut into American Express Co.'s lead at the super-premium end of the card business.
Platinum offerings by banks are not entirely new. In the United States, Chase Manhattan Bank entered the market this month.
Units of MBNA Corp., Banc One Corp., Citicorp, and Providian Financial Corp. have been selling platinum a bit longer-but they developed these products independently of the bank card associations.
MasterCard and Visa will now be out to beat American Express on its own terms. Unlike the current U.S. platinum cards, which are marketed to large numbers of creditworthy customers and prospects, the cards in Latin America will be marketed only to the elite and will have special features.
Other regions are expected to follow the initial showcase launchings.
MasterCard's director for consumer products in Latin America, Edward Brites, said its platinum program is designed for the "affluent customer who travels at least five times a year, is among the top 5% in terms of income, and already has a gold card."
The MasterCard Premium Class card will have a $10,000 minimum line of credit, double the minimum in the United States. It will also have an optional microcomputer chip, which will allow for stored-value transactions and a link to the Internet.
Similarly, the Platinum Visa Card will have a chip-not optional-that links cardholders to a Web site, enabling customers to make travel reservations and review their card accounts on-line. The Visa version will have a minimum credit line of $20,000 and a mileage rewards program.
James F. Partridge, president of Visa's Latin America and Caribbean region, said he expects the cards to be available in the fourth quarter through at least 100 banks in his region.
Mr. Brites said about 20 banks are interested in the Premium Class MasterCard.
American Express originated the Platinum name and concept in 1984. Last fall, it sued First USA Inc., now part of Banc One Corp., alleging infringement of its Platinum rights.
In Latin America, American Express offers Platinum only in Mexico. Nevertheless, Mr. Partridge said, "the reason for this (Visa) card is so that our banks don't have to partner with American Express."
Mr. Partridge said bankers wanted another premium product besides the Visa gold card.
Visa and MasterCard are also planning to launch upscale cards in Latin America that do not have credit limits, but those are not as imminent as the platinum and Premium cards.
In a sign that the U.S. market is becoming ripe for more upscale bank cards, Chase introduced a platinum product July 7.
"It is really designed to bring in new customers," said Peter Roggemann, the Chase senior vice president who heads product development.
Chase has 18 million customers who hold standard and gold cards. Platinum card frills include free enrollment in a frequent-flyer reward program, lost-luggage insurance, and access to a wholesale travel reservation service.
Chase's platinum cards, in both MasterCard and Visa versions, will "give us the ability to get a good-credit-quality customer who normally wouldn't respond to another credit card offer," Mr. Roggemann said.
