Visa International wants to give its worldwide organization more freedom in using its systems, but like a cautious parent it is putting someone in charge to keep an eye on all the creativity it is unleashing.
Inder P. Singh, a former Bank of America Corp. executive who joined Visa last November, was named to the newly created position of global chief information officer on June 17.
He will focus on interoperability, maintaining standards and system integrity, and steering strategic initiatives. At the same time, he said, he will seek new ways to capitalize on the San Francisco-based company's largest asset, VisaNet, which authorizes and settles every Visa card transaction.
"We have been making a lot of modifications" to the network, Mr. Singh said in an interview last week. A chief emphasis is "looking at a distributed processing environment where we can implement some local solutions."
The modified VisaNet will permit the use of smaller Unix-based systems (and similar ones) that are easier to customize, and will thus allow Visa International's six quasi-autonomous regional governing bodies to make more system decisions. "It moves more power out to the regions," Mr. Singh said.
Meanwhile, Visa has to protect its systems and keep track of all the tweaks. Mr. Singh says he will help guide delivery of new processing environments, while "making sure we have rules and policies with which we can preserve our interoperability and the consistency of our environment which is the hallmark of the Visa brand." He also will try to help Visa enter new areas of money transfers, such as between its bank members.
One example of a region-specific need is in Europe, which has embraced smart cards. Now the system has to accommodate the conversion of some countries to the newer EMV standard.
In other countries, private-label cards are becoming popular and require their own changes. The goal is to enable customers "anywhere" to do transactions "in a seamless fashion," Mr. Singh said.
As to the upgrade of VisaNet, which will allow it to handle more transactions, Mr. Singh said the project was on schedule and within budget. Visa completed its new clearing and settlement system last year. Next to switch over is the authorization system, scheduled for the first quarter of 2004.
Before joining Visa, Mr. Singh was the founder and chief executive officer of Exlservice.com, a back-room-operations support firm that was bought by Conseco Inc. Before that he was the chief operating officer of Card Capture Services, which owned the third-largest U.S. teller machine network and was bought by E-Trade.
From 1978 to 1999 he held senior executive management positions at SeaFirst Bank and with the company that bought it, Bank of America. His last title at the Charlotte, N.C., banking company was executive vice president of consumer banking product and delivery support.
In cross-country commercial payments, Visa has the advantage of an already-completed network.
"We are actively looking at various offerings we can create based on the value we have in VisaNet," he said. "With VisaNet's unique positioning, we can provide settlement of actual funds flowing between two members, as opposed to the regular channel, which would be through correspondent banks."
Then there are multinational travel cards. Until now issuers "have not been able to trace issuance crossborder and roll up transactions into a report management can use," Mr. Singh said. "This is where VisaNet comes in: to have the capability to bring all those card products in multiple regions and pull transaction data back."
He said the creation of the CIO post was not a response to developments at other processors. These would include First Data Corp., which through its purchase of the NYCE teller machine network has begun a pilot to process some U.S.-based transactions. Visa is suing First Data over the test, saying it threatens VisaNet's integrity. "We offer a lot of value-added services that are not offered by the competition," said Mr. Singh.
Though Denver-based First Data has become more visible in Europe and Asia, VisaNet does not anticipate any competitive issues in those markets, Mr. Singh said. "All Visa-branded transactions flow through us no matter who processes them," even when there are market "contractions," he said.
