To anyone familiar only with the United States credit card market, Europe is a whole new world.

While the common brand names are there - MasterCard, Visa, American Express, even Plus and Cirrus - Europe has a very different market structure. Or more like 40 different structures, one for each country, ranging from the U.S.-like credit card culture of Britain to emerging markets in Eastern Europe that are just developing clearing systems.

And the bank-controlled company that claims to be the best in Europe is Europay International, based in Waterloo, Belgium.

The company name may be unfamiliar in the West, but to its loyalists - including many of the top bankers in Europe - it is a clear No. 1. Given Europay's alliance with MasterCard, the boasts of its leaders have a tone that is different from much of what comes out of MasterCard headquarters in New York, where officials are more accustomed to the role of No. 2 to Visa.

As in most aspects of national and global credit card rivalries, the boasts and even the numbers are not always what they seem. The MasterCard-Europay combination reports more cards in Europe than Visa International, but Visa handles the greater volume of payments.

What sets Europay apart, according to director and chief executive Ron H. Williams, is a leadership and organizational structure that make teamwork possible across time zones and language barriers.

International Outlook

"If you are on a global board, you have to take a global perspective," Mr. Williams said in an interview.

He says that both Europay and MasterCard - he will take some credit for both - have succeeded at doing "what's best for the world."

"You can only do that if you maintain a high degree of professionalism and focus on the market," Mr. Williams said, obviously pleased at the results.

For 1993, Europay reported a 17% gain in cards, to 94.4 million, and an 11% increase in volume, to the equivalent of about $84 billion.

The Visa side would quibble, or worse: Europay's card total included 69 million debit cards, many of them Eurocheque check guarantee cards that were historically not part of the bank credit card establishment. The debit-type cards, which Europay classifies as "pay now," jumped a healthy 20% in 1993.

The "pay later" cards within Europay, the Eurocard and MasterCard brands, numbered 25 million, up only 8% and well below the Visa brand's total for Europe, the Middle East, and Africa. (Even this comparison is inexact, because Visa does not report European numbers alone, and because debit cards are lumped in. But most market observers agree that Europay's big boost came from Eurocheque.)

Europay prefers to concentrate on card market shares - for 1993 it claimed 57.2% of total cards, up from 55.6% the year before, and 77% of new cards issued, thanks to Europay's opening of, or growth in, markets such as France, Greece, Italy, and Portugal.

In March 1994, Europay announced its first connections to an automated teller machine network in Russia, which will also benefit the MasterCard, Cirrus, and Maestro brands.

"Visa versus MasterCard/Europay is a different story, country by country," said Allen R. DeCotiis, president of Payment Systems Inc. in Tampa, Fla. "If you look at the whole picture, the MasterCard side may have a brand advantage, and Visa the operational advantage. But it is a market that is very much up for grabs."

Regardless of what the numbers show, Europay is a unique success story, even among the cooperative structures common to the credit card arena.

Europay International did not even exist until Sept. 1, 1992, when the two European consumer payment systems - Eurocard/MasterCard and Eurocheque - merged.

That alone was a major cultural event for European bankers, a culmination that paralled the expansion of the European Community. Each company was based in Belgium and had overlapping ownerships, but the corporate structures were multinational and complex.

Eurocheque was organized in 1968 by bankers led by Eckart Van Hooven of Deutsche Bank The international consortium created a paper-based system suited for the continent's huge number of cross-border travelers, allowing them to pay by check in any participating currency. The Eurocheque identification card naturally evolved into a debit-ATM device.

Another German Innovation

Eurocard had similar roots in the German banking community, which had a tradition of cooperative payment-system innovations. Since Germany and most other European countries were not big in consumer credit, Eurocard started as a travel and entertainment card, along the lines of American Express. Eurocard built ties to MasterCard International to assure intercontinental acceptance.

The alliance with MasterCard became frayed in the 1980s, but festering antagonisms to two other U.S.-based organizations and their brand names - American Express and Visa - and the diplomacy of former MasterCard chief executive officer Alex W. Hart combined to bring the organizations closer.

Mr. Williams, a 30-year veteran of National Westminster Bank of London, has been CEO since just before Europay's official opening in 1992. MasterCard International is one of its larger shareholders, but no one has a majority.

A philosophical kin to the now-retired Mr. Van Hooven and others who bought into the cooperative ethic - including former Eurocheque chairman Ulrich Weiss, also of Deutsche Bank, and R. Bernard van Eldijk, the recently retired Dutch banker who championed Europay's creation - Mr. Williams continually refers to Europay's multilateralism as a competitive advantage.

"Europay is the only organization owned by European banks and dedicated to understanding and responding to the needs of European banks," Mr. Williams said in a speech earlier this year.

The anti-Visa sentiment is palpable. Visa International is seen as distant, arrogant, and out of step with what Europeans want.

Jean-Jacques Desbons, the former French banker who heads Visa's London-based Europe-Middle East-Africa region - one of the decentralized entities that Visa set up to be closer to its markets - begs to differ. Unwilling to accept MasterCard/Europay's take on the numbers, Mr. Desbons said more and more European bankers have come to regard Visa as the true industry leader.

Mr. Desbons also pointed to gains in Germany, the quintessential Europay country, where Visa has historically been stymied by the biggest banks' solidarity.

"We are now growing at a faster rate than Eurocard" in Germany, Mr. Desbons said. "We are still playing catch-up, but making significant progress."

He added that at Visa's May 30-31 board meetings in Cancun, Mexico, 13 new German members were voted in. He declined to name them ahead of the banks' own announcements, but said one of them is one of the country's top five.

Mr. Williams keeps pounding the issue of control. He believes Visa's strings are really pulled from San Francisco, and worse, they are tied into the wrong technology.

Europay is "not controlled by other regions of the world," he said. "Europe can differentiate itself, and I think this is becoming clear in the decisions made by the members of the Europay board.

Technology Seen as Secondary

"Europeans know that it is relationships and not technology that will make the competitive difference," Mr. Williams continued in a speech to a conference in February sponsored by the German magazine Bank und Markt. "We were not, therefore, tempted to as one of our competitors was tempted to make a huge investment, which commits them for years, to what could essentially be an old technology, just to get an adequate payback."

Europay prefers the distributed processing and communications systems of MasterCard to the mainframe-based central processing units of Visa. Distributed processing is seen as more flexible, in keeping with the trend toward smaller, client-server computers. Meanwhile, MasterCard and its affiliate are on a campaign called Programme Global, which appears in part an attempt to achieve the consistency across systems that Visa automatically has.

"The imperative for [Visa] is to sell their technology so that they can tie in as many people as possible," Mr. Williams said. "But which prudent man would make a heavy investment in the railroad when, looking at the future just around the bend, he can see modern trucks and roads giving much greater individual freedom of action."

Smart Card Enthusiasts

As might be expected of decentralization aficionados, Mr. Williams and Europay go the further step of being smart-card enthusiasts. Europay went in as an equal partner with MasterCard and Visa in a standardization effort begun late last year.

"We were the first payments company to decide at the board level to rely on the chip for security," Mr. Williams said, referring to a December vote. "The Europay board has said that once standards are published, we will go to the chip.

"I believe the chip is the way we'll go in the future," he went on. "Only 10% of French card transactions are authorized [against a central data base], yet fraud there has dropped like a stone," while the unit cost of the chips, which French banks have embedded in all cards, have dropped from as much as $10 to $1 over 10 years.

Mr. Williams is convinced that fraud reduction, improved credit controls, and "value-added services" programmed into the chip card will pay its freight.

Visa officials are similarly convinced that the chip-based smart card is "the way to go," but the "business case" still has to evolve, Mr. Desbons said.

"You can't justify the investment in the chip on fraud reduction alone, the Visa executive said. "We will have to find value-added features to take advantage of the extended capacity of the chip technology.

"The transition will take at least 10 years, and will be complex to manage. Once the standards are addressed, we'll see decisions on a country-by-country basis."

Mr. Williams agreed that it "won't go overnight," which means he will not be on the job to complete the changeover. At age 57, he called Europay "my last job," and doesn't expect to stay on more than a few years.

Personality Issues

Some European bankers wondered how well Mr. Williams would get along with the new MasterCard International president, H. Eugene Lockhart, who spent some time as a senior executive at Midland Bank in London, an archrival to Mr. Williams' Natwest.

But Mr. Williams said he was pleased with Mr. Lockhart's appointment, calling him a "topclass guy" on a par with Mr. Hart, with whom Mr. Williams grew quite close.

Mr. Williams himself has a reputation as a tough manager whose organizing and administrative skills were ideal for pulling Europay together.

Whenever he goes, he will leave behind a payment system that didn't exist before, a staff of 360, and a strong No. 2 in place: Mark Van Wauwe, the former chief executive of Eurocheque, who became Europay's secretary general after the merger.

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