To those who stuck around to hear the final speaker at Faulkner & Gray's credit card conference San Antonio last week; H. Eugene Lockhart restated his vision of the payment systems industry, and gave a hint of things to come from MasterCard International.

Essentially, Mr. Lockhart repeated the theme he has been sounding since Jan. 31 when his appointment as the card association's president and chief executive was announced.

The message is that consumers around the world are migrating from bank branches, and increasingly using alternative syustems such as automated teller machines, telephones, and home banking devices, to meet their banking needs.

See Technology as Key

Mr. Lockhart believes that this trend "will play right into the hands of people who have experience with nonbranch activity."

When asked what this would mean for bank card issuers, Mr. Lockhart explained that credit card bankers have the skills, marketing experience, and most importantly, the technology, to help their colleagues sell other products outside the branch.

"Card-related products operate at the heart of improving bank performance," Mr. Lockhart said after describing the difficulties bank executives face each day.

A More Jocular Vein

In a less-formal demeanor than thiss first official speech at MasterCard's annual meeting last month, Mr. Lockhart joked that it was good to "get out with the people who pay our salaries."

He addressed a thinned-out audience in a conference room smaller than the ones that had been used for the 35 or so speakers before him.

Some of the remaining attendees expressed surprise that Mr. Lockhart's counterpart at Visa, Edmund P. Jensen, didn't also deliver a speech.

And Carl F. Pascarella, president and chief executive officer of Visa U.S.A., wasn't on hand although he was scheduled to speak at the conference, but no official mention of his absence was made.

Focusing on other aspects of banking, Mr. Lockhbart discussed the changes taking place in the industry.

'It's not fun being a bank CEO. They wake up in a cold sweat because of low or no demand for traditional lending," said Mr. Lockhart, adding that much of the growth in banking is due to acquisitions.

Banks have been losing market share to nonbank competitors for 10 years, and banks' operating costs are too high, observed Mr. Lockhart.

He concluded that the outlook for growth is strong, but bankers need to "restructure their delivery appeal to valuable consumer segments."

Shape by Experience

Mr. Lockhart's vision for the future of payment systems was shaped largely by his experience at London's Midland Bank PLC in launching First Direct, the first branchless bank.

Also, while a senior consultant at First Manhattan Consulting Group in New York, Mr. Lockhart directed a landmark study retail delivery systems in conjunction with the Bank Administration Institute.

Both First Direct and the retail systems study showed that technology is displacing the branch as a center for consumer transactions.

Strategic Thinking

Projecting into the future of the credit card industry, Mr. Lochard revealed MasterCard's strategic thinking on the debit card.

He said that the association expects debit to grow 40% per year over the next five years, aided by the lower processing costs.

Also, he predicted that there will be a cobranded debit card in the future, and that ATM and debit cards will merge, creating one product.

Mr. Lockhart said MasterCard intends to work collaboratively with others in developing chip cards, but the New York association will have a "very significant announcement to make [about chips cards] in the near future."

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