First Bank System Inc. of Minneapolis has realigned its credit card management team, filling a key vacancy at its Denver affiliate and creating a unified organization for all the company's card operations.
The moves follow First Bank's March 1993 acquisition of Colorado National Bankshares, which included a sizable card and payment services subsidiary, Rocky Mountain BankCard System.
Among the appointments announced last week, First Bank named John L. Busselmaier president of Rocky Mountain BankCard. Mr. Busselmaier, 44, had been executive vice president of Colorado National Bank.
He replaced Denny D. Dumler, a Colorado National and Rocky Mountain BankCard executive since the 1960s, who left in November to become chief operating officer of Visa U.S.A.'s automated teller network, Plus System Inc.
First Bank also appointed Fred O. Gumbel, 41, senior vice president of the FBS Retail Payment Svstems Group, which consists of Rocky Mountain BankCard and several card-related business units of the Minneapolis-based parent.
Since 1988, Mr. Gumbel had been president of FBS Card Services Inc., one of the units in his wider domain.
David S. Hessney, 44, became president of FBS Card Services after having overseen the modernization of its customer service systems.
Catapulted to Forefront
By adding Rocky Mountain, First Bank suddenly became a major force in several parts of the card industry, and it is focusing on further growth, according to Philip G. Heasley, Mr. Gumbel's boss and executive vice president of the holding company's product group.
"Retail payment systems is one of the fastest-growing segments of the financial services industry, with more than $340 billion of transaction volume passing through the Visa-MasterCard systems in the past 12 months. That represents a 20% year-over-year increase," Mr. Heasley said.
Big Jump in Volume
First Bank and Rocky Mountain BankCard combined are "the sixth-largest Visa and MasterCard merchant processor, 11th-largest Visa card issuer, and the largest bank issuer of Visa corporate and procurement cards in the U.S.," Mr. Heasley added.
The acquisition brought First Bank an additional $4 billion of merchant processing volume and $1 billion of credit card receivables, plus several hundred automated teller machines, Mr. Gumbel said.
As of Sept. 30, First Bank serviced $1.7 billion of card receivables. The merchant business serves 65,000 retailers, with $11 billion of annual card sales. First Bank issues 500,000 Visa corporate cards and provides procurement services to more than 60 major corporations and utilities.
In his prior role at Colorado National, Mr. Busselmaier coordinated the consolidation of 94 bank branches to 64. He now takes primary responsibility for agent bank relationships, thirdparty processing services, and ATM switching - businesses that complement First Bank's card issuing and corporate activities in Minneapolis.
Line of Command
Mr. Busselmaier and Mr. Hessney at FBS Card Services will report to Mr. Gumbel. All three have worked previously for Citicorp, Mr. Gumbel with Citicorp's Florida thrift and Diners Club, Mr. Busselmaier with Diners Club, and Mr. Hessney in private banking. Mr. Hessney also worked for American Express Co. and Shearson Lehman Brothers.
In a telephone interview from Denver, Mr. Busselmaier said he will be paying close attention to serving the network of banks that are marketing agents for Rocky Mountain credit cards.
He said the agent business "for the most part has not been marketed to very well by the competition. I really feel there's a huge business opportunity out there."
MBNA Seen as Main Rival
Rocky Mountain BankCard has 900 community agent. banks, with clusters in California, Minnesota, and Colorado. Mr. Busselmaier called MBNA Corp. of Newark, Del., his main competitor.
"I think that [Rocky Mountain BankCard's] 25 years in the business provides us a significant leveraging opportunity to go out and do a very good job for this agent banking community," Mr. Busselmaier said. "We'll be building on the strengths of a well-run and well-respected organization.
"We feel we can help support community banks in providing services to their customers in a profitable way," he added. "I feel that there are additional services that the community banks could benefit from."
Aside from its card issuing, merchant processing, agent servicing, ATM, debit card, and point of sale activities, Rocky Mountain has established a niche in developing affinity relationships, such as one with Amway.
Rocky Mountain BankCard also administers a purchasing card system for the federal government's General Services Administration. The program has 50,000 cardholders doing $300 million of sales each year.
The current contract expires in March and the new - or renewed - contractor is expected to be named early next year.