The audacity of Citigroup Inc.'s shift of credit card allegiance to MasterCard from Visa is matched only by the riskiness of the strategy, card industry observers said Wednesday.

Taking stock of the latest surprising turn in the maneuvering for brand supremacy, the experts see Citigroup betting everything on its ability to create a global identity at least on a par with Visa's.

So supremely confident-or arrogant, say detractors-is Citigroup that it was willing to end 20 years of partiality toward Visa and favor a smaller but more accommodating competitor.

With the move will come a new balance of power between the card associations and among their respective member banks. And if Citigroup has its way with the renewed emphasis on its Citi brand-not a foregone conclusion in the view of marketing consultants-the financial industry as a whole will be facing a new breed of competitor that is at once a card issuer and potential household name.

Citi is "trying to reestablish fealty of the bank brand over the credit card brand," said Joel H. Goren, managing partner of Interbrand Group, the New York-based brand consulting arm of Omnicom Inc.

"They have to try," Mr. Goren said. "It would be anti-strategy not to give it your best shot."

"I think it is a strategic mistake," said Linda Echard, president of IBAA Bancard, the Independent Bankers Association of America's credit card affiliate, which has been a strong supporter of Visa to the extent that it democratizes banks' access to the payments system.

She said Citigroup risks alienating its many cardholders who have grown loyal to Visa. But at the same time, she said, with Citigroup putting more resources behind MasterCard, the entire banking community stands to benefit by having a stronger MasterCard facing off against Visa.

Citigroup, in asserting its own interests, successfully played one association off against the other, and as association politics plays out in the background, a competition for consumers' hearts and minds is getting under way with new teams and sets of rules.

Citigroup's contention with Visa came to a head last Friday as the banking company's co-chairman, John S. Reed, and Robert I. Lipp, co- chairman of the global consumer group, submitted their resignations from the Visa board. They had become directors only three months ago, when Mr. Reed floated a proposal to allow the Visa mark to be moved to the backs of cards, thereby permitting Citi more prominence on the front.

Visa failed to bend to the desires of Citigroup, which has issued about 30 million U.S. credit cards, according to The Nilson Report. MasterCard has reportedly presented a package that gives Citi the leeway it was seeking, plus pricing concessions. But the Purchase, N.Y.-based MasterCard association has given no public confirmation.

Citigroup officials also were not talking Wednesday, but Mr. Reed made his viewpoint clear in a January discussion with investment analysts: "It's amazing that we (big banks) have been willing to live with a communal name so prominently displayed. Our own aspiration is to deal with customers through the Citi name. ... We are having active conversations that probably will cause that to happen."

Mr. Reed said he did not intend to prevent smaller banks from continuing to ride on the "collective brand," though he implied that chief executives of two of Citigroup's big-bank peers on the Visa board, Bank One Corp. and BankAmerica Corp., were in tune with his thinking.

The domestic Visa board stayed unified in the recent discussions and there are no indications that any are going down the same road as Citigroup, said Visa U.S.A. executive vice president William E. Stewart.

A BankAmerica spokesman said Wednesday, "We remain strong advocates for changes in how the card associations operate. We don't have a comment on Citigroup's actions. We have long sought the flexibility to display our brand on the card as we choose and to move the Visa brand on the back or the bottom."

"What Citi asked us to do was to redesign our structure in line with (their) intents," Mr. Stewart said. "What it would have done is reduce the Visa organization to that of basically a processor."

Fully accommodating Mr. Reed "would have squandered all the other elements that have made Visa the most successful joint venture in the history of the card business," Mr. Stewart added. "Our business model has been successful for 30 years, and they have a different business model. We think that our model has demonstrated for decades that it contributes to the success of banks."

Mr. Stewart said the dispute came down to irreconcilable perspectives. Citigroup's "formula for success" involved "substituting its brand for the Visa brand. ... While we think that the bank brand should be preeminent, we also think our brand or acceptance mark is complementary to the bank brand."

He disputed press reports about the severity to Visa U.S.A. of the potential loss of Citigroup's card business. He said Citi contributes 6% of revenue, adding, "We don't like to lose a customer, but losing this one isn't going to change anything."

It would probably take a few years for Citi, which is already 70% MasterCard because of its acquisition of AT&T Universal Card Services last year, to approach 100% MasterCard issuance. Because of some contractual and cobranding commitments, there would still be some Visa cards in any event.

Ms. Echard of IBAA Bancard said she found it ironic that Citi, which was complaining about how its fees to Visa go toward advertising, sports sponsorships, and other purposes it deems extraneous will now have to "pony up" to bring MasterCard more up to speed.

"What you spend to market Visa may be a little less today because of its brand strength," she said. "Consumers do perceive a difference, and those that prefer Visa will not be happy and may go somewhere else. Citi risks attrition, and that is on top of card-reissue expense."

She added that Citi has a long way to go to meet its branding aspirations. Only three financial services brands-Visa, American Express, and MasterCard-showed up in the top 100 in Interbrand's U.S. brand power survey last year.

"Citibank is a global brand to a certain extent," said Alan Bergstrom of Brand Consultancy in Atlanta. "But it is not anywhere near the awareness or affinity that the Visa brand has on a global basis. I just hope they are not shooting themselves in the foot.

"I'm not sure if (Citi) will ever be as ubiquitous as the Visa brand. ... If MasterCard caves on that issue, I think the winner in this whole thing will be Visa. MasterCard as a brand becomes second in terms of its preeminence on the card."

That would leave MasterCard in more of the "processor" role that Mr. Stewart said Visa was resisting.

James Shanahan of Business Dynamics Consulting in Newark, Del., a one- time MasterCard employee, said he viewed the Citi-MasterCard deal as "almost a takeover" or privatization of the association. He said reducing a world-class brand to a "bug" on a card's behind is "worse than new Coke"-a reference to a notorious branding fiasco of the 1980s. "They're definitely playing with fire."

Ronald Zebeck, president and chief executive officer of Metris Cos. and a MasterCard director, disagreed with the naysaying. He called the Citi relationship "fantastic for MasterCard," which he views as more flexible than Visa and less insistent that "its brand is more important than its members'."

"Six or seven years ago cobranding was the rage and MasterCard was a leader in that because Visa catered to the bigger banks that didn't want it," he said. "I look at this as an opportunity for more flexibility" in MasterCard logo placement.

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