Another Baby Bell announced plans to issue a cobranded credit card, bringing the tally up to four out of seven offering the multi-purpose plastic to their customers.

SBC Communications Inc., formerly Southwestern Bell Corp., and Mercantile Card Services Inc. will jointly issue a cobranded Visa card by March.

Although details of the program are set, Ray Einsel, president of Mercantile Card Services, said the partners are not divulging that information until the official launch for "competitive reasons."

As cobranded programs proliferate, valuable partners like the regional bells are getting snapped up by eager card companies. Mr. Einsel said SBC sent requests for proposals to a number of banks, but "we won it because they have confidence in our ability to run the business."

Mercantile's card program has more than doubled in the past two years, from $400 million in outstandings to $840 million in 1994, serving over one million cardholders.

The two companies have geography in common as well. SBC provides local telephone service for more than 10 million customers in five states, including Missouri, Oklahoma, Kansas, Texas, and Arkansas, while $12.2 billion-asset Mercantile operates 42 financial institutions in Missouri, eastern Kansas, southern Illinois, Northern Iowa, and Arkansas.

"We deal with each others' customers all the time," Mr. Einsel said. "It's an opportunity to take advantage of the strengths of both organizations." He referred to SBC as a "natural partner for us."

"I think it's a good match," said James L. Accomando, president of Accomando Consulting Inc., a Fairfield, Conn.-based firm. "It makes for good synergy when a regional bell matches up with (a company) that has a similar footprint in the marketplace."

This will be Mercantile's first cobranded program, though it has issued regional affinity cards with the St. Louis Blues, a hockey team, and the St. Louis Zoo.

"We have a lot of programs targeting different markets and groups which are consistently adding accounts each month," said Mr. Einsel.

The most popular Mercantile card product carries no fee and a prime- plus-6% interest rate, equal to 14.5% at this time. Many cobranded phone cards offer 10% discounts on telephone services charged to the account, no annual fee, and a 1% or 2% rebate on general purchases.

Mr. Einsel expects the SBC Visa to attract a considerable number of consumers, "significantly increasing the size of our business."

Mr. Accomando said the move signifies the regional bells' quest to level the playing field in their industry. All of them either have programs or are negotiating with banks at this time.

Household International issues the Pacific Bell Visa and the Ameritech Complete Card, while U.S. Bank Corp. issues a cobranded card for U S West. Nynex, Bell Atlantic Corp. and BellSouth Corp. are still up for grabs, but the Nynex deal with Chase Manhattan Bank has been rumored to be in the making for months.

Telephone companies have been a major force in the credit card business since the 1990 launch of the AT&T Universal card, which has attracted 22 million cardholders to date. GTE, MCI, and Sprint also have cobranded programs.

Mr. Accomando said AT&T's entry into the card business was an attempt to recapture access to customers it lost with the breakup of the monopoly in the 1980s.

"The telecoms are not in the card business as a primary function," he said. "The credit card is a vehicle to acquire and effectively manage a data base."

For example, Household International, which issues the General Motors MasterCard, will be offering financial services to its 8.5 million GM Card holders.

Mr. Accomando added that telecommunications companies are issuing cards to gain or maintain market share for their core products within their region, while appropriating long-distance business from the big three national carriers.

He pointed out that increased access to their customers would promote loyalty and could lead to cross-selling all kinds of interactive services, such as video on demand and home banking, in the future. "What you could do with the data base is unlimited."

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