Visa International president Edmund P. Jensen speaks a lot these days about "the endgame," and he is not referring to retirement.
He sees it as a new spur to growth and innovation. At age 60, and four years into the top job at the top bank card association, Mr. Jensen continues to defy any notion that he came in as an interim caretaker.
A year ago he was expressing concern that Visa was inadequately focused, "chasing too many rabbits."
Mr. Jensen, a former vice chairman of U.S. Bancorp of Portland, Ore., said his attention to "the endgame" is all about winnowing down the list of strategic priorities.
He is "closer to finality" in refining the goals, Mr. Jensen said in a recent interview.
"Defining the endgame, or alternative endgames, is important" as a starting point, Mr. Jensen said. "This industry tends to get more caught up in technologies than in the business concepts."
In many cases, he said, "the technology is there to do whatever we want. The real question is, What do consumers want?"
He left no doubt that smart cards, a nagging controversy for him as well as his counterparts at MasterCard International, have been misunderstood for that very cart-before-the-horse reason. Smart cards are also one of the four "important directions" currently guiding his and Visa International's thinking, the others being debit cards, the brand, and the technology upgrade known as VisaNet II.
These Big Four do not supersede what Mr. Jensen calls "a longer list of important strategies." They are not meant to divert attention from, say, Visa's involvement in Internet commerce, its pursuit of the still emerging consumer credit market in Europe, or the high priority assigned to commercial cards in the United States.
But the simpler strategic outline tends to raise conversations to a higher plane. That is where Mr. Jensen, a Visa International director when he was a banker, has always been aiming, thereby complementing the more tactical concerns that preoccupy his regional presidents. (For the view from Visa U.S.A., see box.)
"When we can see the endgame in something like the chip technology, then it is easier to work through what we should be doing," Mr. Jensen said. "We could be talking about a bank card with access to bank services, or we could be talking about an account that doesn't have to be a physical card.
"Think about getting that card out to everyone in the world, including children. We wouldn't just be talking about 600 million cards, but billions of Visa cards with various functions. That should mean growth for our members. That's the endgame as I see it."
He admitted that Visa has fallen short in its communications about, and selling of, chip cards. Mr. Jensen has been speechifying in their favor since his first months at the company.
Banks in some parts of the world-notably Japan, Hong Kong, and other Asian countries-have latched on to the Visa Cash proposition and begun competing vigorously against MasterCard's Mondex.
But the United States, Visa's base and still the credit card industry power center, has been recalcitrant. Domestic bankers cite the lack of a "business case," particularly in the stored value service that would automate cash at the point of sale.
Jerome Svigals, a California-based smart card consultant and critic of Visa, has accused it of having its "head in the sand." He said Visa is reluctant to jeopardize the income earned from on-line network activities, and does not see the additional revenue potential in services that could be added on to chip cards.
Visa has designed its smart card strategy, which it calls the Partner Program, to enable member banks in each country or region to adopt the technology and introduce any or all possible services at their own pace. Mr. Jensen stands by this framework and said he is pleased with the results, "but not with the confusion out there."
He said fears of high infrastructure-conversion costs are overblown. "There is tremendous confusion about chip, mainly because we haven't sat down to figure out what we want to give the consumer."
He warned that the "U.S. could fall behind."
Carl Pascarella, president of Visa U.S.A., said, "Stored value is not a business proposition. Everybody concedes that."
But the U.S. unit is exploring potential applications in health care, travel and entertainment, and government settings, wrestling with the key question of "who will pay for it?," Mr. Pascarella said.
"There needs to be more push than pull, and we need to be creative," he said. "We are spending a lot of time on chip, but it is not chip for chip's sake."
Visa has been working with a device called Smarty, developed by Fischer International Systems Corp. of Naples, Fla., that enables a smart card to be entered into, and read by, a personal computer's disk drive. Mr. Pascarella said this suggests electronic commerce could propel chip cards, not vice versa.
"It doesn't necessarily play in the point of sale environment, but it does in electronic commerce," he said.
"Now you have an authenticator. The world of e-commerce opens doors to chip. We have to ask how our brand works in that environment. We have to be out front to make sure we don't just maintain our position but take it to a new level. We will be changing the way we deal with the merchant and consumer."
"It seems chip will be imperative," Mr. Jensen reiterated, though the progress will occur "country by country."
"Visa has to be involved and do more to be a stimulus than it has in the past," he said. "It is so important to understand the concept-and I am not talking about the business case. It is, what will the consumer do with it? What will we offer with the technology?"
Complicated as the chip issue is, it exemplifies why Mr. Jensen had to curb the rabbit-chasing. Debit is critical, he said, because it is linked to the demand deposit account. "We have to get there to do a chip card that is banking-based."
While still responsible for one of the world's most elaborate on-line transaction processing networks, which handled 2,400 transactions in a peak second last Christmas season, Visa is moving toward a more modern client/server architecture. In so doing, it is opening itself to alliances and partnerships that would have been unheard of in a previous generation, requiring new organizational flexibility and more enforcement of service quality and branding standards.
Mr. Jensen suggested that Visa could strengthen its position as an industry leader and technical resource as organizations such as the Banking Industry Technology Secretariat, led by major U.S. bank chief executive officers, study the alternatives and seek better ways to coordinate. He said MasterCard should benefit similarly, but of course his first interest is in Visa's growth, and that would come through its strategic focus.
"We are well past where we were a year ago," he said. "We have engaged in debates at the board. It will be clear to all what Visa is concentrating on and why."
