As they continued their cross-examination of American Express Co. executive Stephan B. McCurdy on Tuesday, attorneys for Visa and MasterCard tried to show that Amex's shortcomings - not the card associations' rules - were responsible for the nonbank company's failure to attract U.S. banks as partners.

The lawyers in the antitrust trial made the point that American Express had opportunities to work with banks and nonbanks that did not belong to the credit card associations, but chose not to. Instead, Amex targeted banks that were already well-established credit card issuers, such as Bank One Corp.'s First USA subsidiary.

According to Mr. McCurdy's testimony, First USA was known internally at Amex as "uno," a nickname reflecting Amex's strong desire to cut a deal with the bank.

Mr. McCurdy, a witness called by the Department of Justice, said First USA had been interested in signing an "enhanced distribution" deal with Amex in Canada and the United Kingdom, where Visa's and MasterCard's membership rules do not apply, but backed away for fear of angering the card associations.

James Egan, a MasterCard attorney, suggested Tuesday that the deal with First USA fell apart because Amex "was slow to respond" to First USA's queries. Mr. Egan said others had described Amex as "arrogant and difficult to work with."

Mr. Egan said Amex had wanted to convert First USA's customers who charge high amounts on their cards to Amex cards. The idea was that First USA would profit from Amex's higher interchange rate. The credit card associations make the point, however, that higher interchange rates eventually get passed on to consumers.

In Monday's court proceedings, Stephen B. Bomse, a Visa attorney, had sought to prove that American Express' negotiations with Wachovia Corp. ended in 1998 because Amex was not willing to share its highly profitable cobranding program with Delta Airlines or its membership rewards program, both of which had interested Wachovia.

Mr. McCurdy, a vice president in charge of forming partnerships between American Express and banks in the United States and Canada, said Amex could not put those programs on the table because contracts with third parties were involved.

Visa's and MasterCard's attorneys also sought to disprove Mr. McCurdy's contention that Amex's negotiations with Dime Savings Bank fell through because Amex does not offer debit cards. They pointed to Citigroup as an example of a successful issuer of debit cards that does not offer the offline debit products of Visa and MasterCard.

"The point is you can be a successful issuer of debit cards without offering a card with the Visa/MasterCard flag on it," Mr. Bomse said.

Mr. McCurdy had testified Monday, as the trial entered its second week, that Amex's partnership negotiations with at least 10 banks fell apart as a result of the banks' concerns over Visa and MasterCard rules, which prohibit members from issuing card brands of competitors. It is these rules, among others, that the Justice Department is seeking to change.

On Monday, Mr. Bomse of Visa said there is "a large potential pool of nonbank issuers" Amex could have worked with. Mr. Bomse presented internal American Express documents showing that the company's wish-list of potential partners included about 400 companies, many of them nonbanks. That list included State Farm Insurance, Target Corp., Morgan Stanley Dean Witter & Co., General Motors Acceptance Corp., and Neiman Marcus.

Mr. McCurdy said Amex had not been able to sign an issuing agreement with any nonbank company in the United States, and had been trying to sign up large retailers and insurance companies only because Visa's and MasterCard's rules had been thwarting it from working with banks. "This is the only country where we haven't been able to sign a deal," he said.

Mr. Bomse pointed out that these nonbank companies were not "hindered" by Visa's and MasterCard's rules, but still chose not to work with Amex. Mr. McCurdy said the reason was that Amex had trouble getting nonbank companies to become card issuers.

On Tuesday the credit card association attorneys showed the court Amex documents that listed at least four banks and credit unions interested in issuing Amex cards. In each document, however, Amex described the banks as "too small."

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