All Cards Are Local: Barclaycard CEO Juggles Many Businesses

Barclays' credit card operation might be a vast global business, but managing it amounts to overseeing a collection of smaller fiefdoms.

Valerie Soranno Keating, the global head of the British bank's Barclaycard unit, spends much of her time juggling different regions and goals. Nowhere is that more apparent than in the emerging and tricky area of mobile payments: While Barclaycard has relentlessly promoted its version of the technology in its home country, the bank plays a supporting role at best in mobile payments in the United States.

Keating calls that strategy both deliberate and inevitable, given the different competitive landscapes for her bank in the two countries. Barclaycard says it is the largest credit card issuer by assets in the United Kingdom, while it barely cracks the top 10 here. The American payments industry is also generally bigger and more crowded, she argues, making it difficult for any one bank or company to make a difference in customers' choice of payment devices.

"The U.S. is a much tougher market to move. … It's just larger, and the concentration on the card issuing side and the merchant acquiring side is just not as great," Keating says. "It's far more diversified, so to make contactless work across an entire market" is harder.

This spring, Barclays unveiled its PayTag mobile payments sticker for British customers to paste on the back of their phones, and hired American pop-culture fixture David Hasselhoff to advertise it. But while the bank says it may test those devices at some point in the United States, they remain unavailable here for the moment. Instead, Barclays is participating in slower-moving mobile payments efforts, including the Isis joint venture.

Ever since it bought the card lender Juniper Financial in 2004, Barclays has chosen to work as a behind-the-scenes issuer in the United States, selling credit cards on behalf of partners from L.L. Bean to Sallie Mae (SLM). Part of the reason behind that strategy, Keating says, is that the bank doesn't have a retail branch presence in this country and doesn't plan to seek one.

"Our approach and our business model in every market where we operate is somewhat different," she says. "In the U.K. as well as South Africa, we're able to leverage a strong retail branch network" to cross-sell credit cards to existing bank customers.

"We don't have a retail branch network in Germany, we don't in Scandinavia, we don't in the U.S., so our model is somewhat different," she adds.

Keating, 48, spent 16 years at credit card specialist American Express (AXP) and ran its global travelers cheque and prepaid business before jumping to Barclays in 2009, where she soon took over its global card unit. Since then Keating has spun around the globe, overseeing operations from Delaware to Johannesburg; last year, American Banker Magazine named her the fourth most powerful woman in finance. When not traveling, the mother of twins lives in London with her family and still rents out their former home in New Jersey, because "the market has just been terrible for selling."

She calls herself satisfied with the partnership model of the U.S. credit card business, although Barclaycard has expanded the services it offers American customers. In May, it started selling online savings accounts here, in part to fund its credit card operations.

"We are still very committed to our partnership approach. … As we expand, we will expand within that model, but also with any logical adjacencies that support that model," Keating says.

Demand for the online deposits is "going very well so far" and "on track with our plans and expectations," she says, declining to provide specifics.

Expanding into more consumer financial products, however cautiously, also means more time spent with regulators — a delicate topic for Barclays, which has found itself a punching bag this summer after the Libor scandal broke. The London interbank offered rate was manipulated by traders far from Keating's division, but the rate-fixing's effects have rippled throughout the bank, costing chief executive Robert Diamond and chairman Marcus Agius their jobs.

Payments consultant Philip Philliou says he does not expect the Libor scandal to rub off much on the lender's American customers. (Indeed, many of those customers may not even have heard much about it; last week the nonprofit Media Matters for America found that the main broadcast-news programs have barely covered the Libor scandal this summer.)

"For the American consumer, it's probably not that relevant," Philliou says. "Business goes on, and [Barclays is] still a recognized global brand name."

Keating, who was interviewed on the day that Barclays agreed to pay British regulators $450 million in Libor-related fines, says her unit is fully committed to being transparent with all of its global customers.

"I spend a lot of time with regulators and on regulatory issues really across the globe. The one commonality is continued transparency for customers, which is a principle that Barclays fundamentally believe in," she says. "I don't look at regulation as something that we get concerned about. … We try to work closely with the regulators to achieve that common objective."

(A spokesman reaffirmed her comments last week, declining to comment further on Libor.)

Keating also weighed in on the Consumer Financial Protection Bureau and its new credit card complaint database, which banks have protested for publishing subjective — and potentially reputation-damaging — information.

"You can never say that more transparency is bad for the industry. You just hope that whenever things like this happen and it's new, that everybody takes it in context," Keating says, expressing some reservations about the database.

"When you don't adjust for the scale of the businesses … when you just go for very simple transparency, a lot of those differences, on face value may not let you conclude what you should conclude," she says, before reiterating, "Transparency's always a good thing, and all that does is force those conversations to take place."