The San Francisco payments network said Tuesday that it had launched what it calls a "reputation campaign" in Washington to highlight the benefits of plastic over checks and cash. Print and digital advertising began Monday, and television and radio commercials started airing Thursday in the capital — on the day and in the city where members of the House Financial Services Committee held hearings on a bill that would regulate interchange fees. (See related story.)
The news cheered credit card industry members, after a summer in which retailers intensified their efforts to lobby for interchange regulation. Those efforts culminated in a Capitol Hill press conference last month as 7-Eleven Inc. delivered more than 1.66 million customer signatures on a petition to "stop unfair credit card fees."
"For about three and a half years, the merchant community has done very effective lobbying here in Washington about the interchange fees, and there's been very little pushback from the banks," said Brian W. Smith, a former general counsel at MasterCard Inc. and a former chief counsel at the Office of the Comptroller of the Currency, who is now a partner at Latham & Watkins LLP. "This is very, very interesting and long overdue … and I for one am delighted."
Despite the timing — which executives called "totally coincidental" — Visa said that influencing the interchange debate was a secondary goal for the "Currency of Progress" campaign, which the company started developing early this year.
"There's quite a bit of interest and debate at the moment in the financial services industry, around issuer practices," William Sheedy, Visa's group president for the Americas, said in an interview Tuesday. "Secondarily, there's an interest to address some of the discussions that are being had in D.C. on the topic of payments, and we think the campaign produces an explanation of the value that Visa provides."
Eric Grover, a former Visa executive and the principal of the consulting firm Intrepid Ventures, called "nonsense" Visa's efforts to downplay the relationship between the interchange debate and the new campaign. "This is not coincidental. They're launching this campaign at a time when this debate is at the front burner," he said. But he argued that the campaign might not be aggressive enough: "There is a political theater here and I'm not sure that the Visa campaign is sufficiently playing into that. … I think a few more body shots on this would serve them well."
Sheedy said that, especially in the wake of its initial public offering last year, Visa felt the need to "clarify" its identity as a payments company and its new independence from the banks that issue cards on its network. "The better people understand us in our role, … the more we're trusted," he said.
The campaign includes video interviews with merchants, such as taxi drivers and the owners of the New York restaurant Commerce, who told American Banker in August that they had decided to stop accepting cash because "it seems a burden on us to have two systems. It's the age of electronic transfers."
Visa would not disclose the amount it spent on the campaign; Sheedy called it "significant," if not on the same scale of what Visa spends on consumer advertising. But it is long-term — the company has committed to buying ads for at least the next 12 months and may eventually expand the campaign's scope, according to Doug Michelman, Visa's head of corporate relations. "This is not intended to fight any particular skirmish, it's intended to be a long-term articulation of who we are and what we do," he said.
