In yet another repercussion from former Citigroup Inc. chief executive officer John Reed's split with Visa U.S.A. and the banking company's realignment with MasterCard International, Citi has been moving its Diners Club card customers from the Visa Plus automated teller machine network to MasterCard's Cirrus network, MasterCard said Monday.
Diners Club, which has a small but loyal base of travel and entertainment charge card customers, is far more limited in merchant acceptance than Visa and MasterCard, so it is important to Diners Club cardholders to be able to withdraw cash with their cards at ATMs. Because of Citibank's longstanding affiliation with Visa, Diners Club has used Visa's Plus ATM network to date but will switch exclusively to Cirrus in late August, according to a source with direct knowledge of the situation.
Citibank plans a global advertising campaign to raise awareness of the change, which will include ads in in-flight magazines, airport signs, and inserts in monthly statements and newsletters, the source said.
Rules at both Plus and Cirrus require exclusivity. Diners Club has been "grandfathering" its Plus cards out of the system for the past few years, the source said.
By the fall, Diners Club cardholders with ATM personal identification numbers will be able to get cash with their cards at teller machines connected to the Cirrus network, which has terminals at 790,000 locations in more than 100 countries.
In early 1999, Mr. Reed fell out with Visa over various issues, including the association's refusal to let Citibank relegate the Visa logo to the back of cards. MasterCard was apparently willing to accommodate him, and Citi switched its primary affiliation.
Ann Camarillo, the chief debit officer in MasterCard's global development group, said in a statement: "In a world where payment card issuers are continuously challenged to provide a better service to customers, Cirrus offers and easy way to increase revenue while enhancing cardholder satisfaction."
Rosetta Jones, a director of Visa U.S.A., said in a statement that "Diners Club's "decision comes as no surprise and has been expected for sometime. Visa Plus is the largest global ATM network and continues to grow worldwide. We are pleased to provide cardholders prompt, reliable, and secure ATM service at more than 785,000 locations in 139 countries."
Diners Club, started in 1950, was the first charge card. But its portfolio has always remained small - particularly in the United States - because it has been marketed exclusively to the well heeled and well traveled. James Accomando, the president of Accomando Consulting Inc. of Fairfield, Conn., who has done work for Diners Club, said the brand tends to have "very good adoption rates" in countries in Asia and South America where only the wealthiest people carry plastic.
Once credit cards become more prevalent in a country, MasterCard and Visa become more popular, Mr. Accomando said. Meanwhile, Diners Club will probably remain relatively small, and customers will continue to have to rely on ATMs in to make up for voids in merchant acceptance.
"Diners Club never skewed down to small-ticket items or mass-market locations," Mr. Accomando said. "That really wasn't part of their business dynamic."
