Pamela Joseph looks forward to the quarterly meeting of her innovation group, the managers responsible for developing U.S. Bancorp's next wave of cool payments products.

Joseph spends most of her days immersed in the nutsandbolts of how people spend money, and how to turn those transactions into revenue. Listening to ideas for innovation helps her shift gears, to focus on the future.

"That's when I can step back from the daytoday and think about where we're going," she says.

This ability to look forward has helped her make the Minneapolis banking company into one of the biggest forces in payments. Joseph's unit has been consistently profitable, and the key for the past year was a simple strategy: acquiring operations to boost the top line and protect the bottom line.

U.S. Bancorp purchased card portfolios with $1.7 billion in cardholder balances in 2009, and has bought more this year. The company unveiled its well-regarded FlexPerks travel rewards program last year, and Joseph's unit formed Syncada LLC, a joint venture with Visa Inc. that expanded her company's existing business-to-business invoicing network into an international payments network. "All of this fits into our plan of investing through the recession," she says.

And it's worked. While second-quarter revenue from credit and debit cards was up only 2.7 percent from the prior year, the payments services unit posted net income of $180 million. That is triplewhat it made a year earlier and nearly a quarter of the company's overall earnings.

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