MIAMI - True to its promise, Citibank has begun placing the MasterCard International logo on the back of some of its credit cards.
In its first test since coaxing MasterCard to adopt more flexible branding policies last year, the world's largest credit card issuer is testing the new look with cardholders in some West Coast cities, said Robert W. Selander, president and chief executive officer of MasterCard.
The new cards have the MasterCard hologram and logo on the same side as the magnetic stripe. Text on the card explains the design change to merchants.
Visa's board of directors turned down the Citigroup subsidiary's request to try this change, and the dispute led Citi to resign from Visa's board and join MasterCard's. MasterCard says it is in the association's interest to accommodate banks that want to highlight their own brands, and it is using this policy to try to cement bigger, longer-term deals with issuers.
"Any member can do it, but they need to have a commitment to MasterCard," Mr. Selander said during an interview at Faulkner & Gray's Credit Card Forum XII.
Mr. Selander hinted that other big banks may follow suit. "We have agreements with several of the largest players," he said. "As you can imagine, we don't talk about those agreements and neither do they." Besides Citibank, Chase Manhattan Corp. and MBNA Corp. are the largest members of MasterCard's U.S. region board of directors.
Mr. Selander said MasterCard has "more and more of every size customer agreeing to multiyear deals where we agree to support them in a way that's most appropriate for their strategy."
In another sign of the close ties between Citi and MasterCard, Citibank has become one of the first MasterCard members to offer a "virtual account" - or cardless credit card - for Internet use only. MasterCard recently developed specific guidelines for such products.
Citi's product, CitiClick, is meant to reassure skittish online shoppers of the security of transactions. Mr. Selander said other banks - such as Unibanco of Brazil and HSBC of London-based HSBC - are offering similar versions.
MasterCard has "really evolved in 18 months," Mr. Selander said, from a "one-size-fits-all" model to a much more "tailored partnership."
Mr. Selander said he took a dim view of Visa International's plans to spin off its VisaNet card processing business, now known as shared services, into a standalone division. Mr. Selander's counterpart at Visa International, Malcolm Williamson, described this plan in an American Banker interview last week.
Like Visa, MasterCard would like to capture more authorization and clearing business, particularly in countries that use MasterCard for international transactions but regional companies for domestic transactions.
Mr. Selander said that if Visa thought that was "the only way" to deliver better service, then he wished his rival "good luck."
