For a special historical retrospective on credit cards published last Friday, American Banker asked a number of industry leaders and observers to provide some thoughts and impressions about this banking success story. Here are some that did not appear in the supplement because of space limitations.

The credit card is the most consequential product the U.S. banking industry has ever invented. If you look at the profitablility over the last 10 to 15 years it clearly buoyed the bulk of the U.S. banking industry and was in fact the salvation of some of our largest banks. If you look at the products the industry itself has created, the most consequential brands in the entire banking industry are MasterCard and Visa. They are not Citibank and Chase.

Alex W. "Pete" Hart

Former president, MasterCard

Executive vice chairman,

Advanta Corp., Horsham, Pa.

I had my first exposure to credit cards in 1969, and it was exciting. They were very different from anything I had heard about what banking was all about. It was the beginning of a big change in the payment system and the way banks work.

The change should have been quicker, and would have been if banks were not so regulated, Most bank managements came from the commercial side, far removed from credit cards and not ready for what they represented. They were the impetus for a new, creative thought process, but it should have taken the industry further sooner.

William M. Randie

Senior vice president,

Huntington Bancshares,

Columbus, Ohio

In the early days, credit cards was a career "Siberia" at most banks. It didn't attract fast-track bankers, and was little understood by senior management. We who got into it by fate or design quickly discovered it was one of the few areas in banking that could be operated as an entrepreneurial business, over which you could have complete control. With no past frames of reference, you invented the rules as you went along.

You made some good decisions, and some outrageous errors, and you learned a lot.

Richard Speer

Chairman,

Speer & Associates, Atlanta

For the first 25 years, the industry was barely awake. [Sen. Alfonse] D'Amato's rate-cap proposal woke it up and forced it to give consumers a better shake on rates, but they have to be lowered more. The arrival of new players also increased competition, which is better for consumers, I still think more could be done, but we're working on that.

Ed Mierzwinski

Consumer program director,

U.S. Public Interest Research

Group, Washington

Most significant event of the '90s: The entry of nonbanks like Discover, AT&T, GM.

Most significant competitive trend: The changing points of differentiation from affinity to enhancements, to annual fees, to interest rates, to reward marketing and frequency marketing.

Anne Morgan Moore,

President,

Bill Adcock,

Chairman,

Synergistics Research Corp.

Atlanta

I think the most meaningful contribution to the overall bank card industry in the last 30 years came from [Visa president] Dee Hosck and the impact he had on credit card growth and the change from what was a proprietary private-label business.

He set the stage for the systems that will bring payment systems into the next century.

Charles Walsh

Executive VP, group executive

Chemical Bank, New York

In the buildup to the Truth-inLending law (1970) we had a lot of concerns, but they were mostly about government intervention that might keep us from doing other entrepreneurial things. The law actually came as a relief, putting an end to the unsolicited mailings and other abusive practices. Despite the tens of millions of dollars lost, we created an instant business. The masses got a product that was previously reserved for corporate chieftains, and that was a good thing for America.

Edward J. Hogan

Senior vice president,

MasterCard International

New York

The greatest accomplishment over 30 years has to be electronic capabilities, the technical expertise that allows banks to offer services they never could have dreamed of.

What was labor-intensive was completely taken over by computers. Back-office staffs 30 years ago were double what we have now, yet banks are winning service awards like never before.

Robert Bouza

President, credit cards,

Key Federal Savings Bank

Havre de Grace, Md.

How will the exchange of information evolve from an environment driven by plastic and paper to one of smart cards and, eventually, just electronic impulses? Charge and credit cards are used as a means of identification and recognition. But ultimately, people will be able to identify themselves in other ways. Transaction information, inquiries, and settlements will be done electronically, giving us greater speed and integrity of data.

Phillip Riese President, Cardmember Financial Services Group, American Express Travel Related Services Co.

New York

Some products come and some products go. Certainly we have a product that has become universally accepted, with very high utility for consumers. On a more personal note, I'm really proud and pleased with the emphasis we have had on providing value to consumers and really trying to meet their needs.

Eileen M. Friars

President,

NationsBank Card Services

Charlotte, N.C.

At First Chicago, corporate commercial banking had been dominant since the 1950s. In the 1970s it was overtaken by international banking. I wanted to bring equivalent prestige to retail banking. But to do this, we needed people, time, and product. The credit card was a great beginning.

A. Robert lbbeud Fortner chairman, First Chicago Corp., in his book, "Money in the Bank"

The pressure on banks to stay competitive will get even greater. Huge players like American Airlines offer such tremendous side benefits. it is harder and harder for bankers to keep up. Even the biggest banks can't match the mass issuing of General Motors or Ford, or the great deals they offer to buy their products. Banks will always want to offer credit cards, but it may only be as agents of some body else.

J. Paul Boushelle

Executive vice president.

First Security Bank of

Mexico, Albuquerque

Before there were national bank card associations, there was no national brand identity. Their creation alone was significant, pooling the industry's resources to make it mainstream.

If that put the industry in second gear, the technology put it in overdrive. That's why the credit card is a part of everyone's lives today.

Robert B. McKinley

President

RAM Research Corp.

Frederick, Md.

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