The merger of NationsBank Corp. and BankAmerica Corp. will give G. Patrick Phillips responsibility for the fifth-largest credit card business in the United States.

But size is not the lone barometer of leadership, said NationsBank's president of financial products, who was designated president of the card services group for the new BankAmerica.

"I would argue that we are already leaders," Mr. Phillips said in a telephone interview.

NationsBank brings into the coast-to-coast megabank the second-largest debit card and 11th-largest credit card businesses, cobranding relationships including U S Airways, several smart card pilot experiences, and the second-largest commercial card program. (See article, page 12A.)

BankAmerica, the original Visa bank, controls the largest debit card and 10th-largest credit card programs, in addition to the fourth-largest merchant processing business.

"Each bank is a leader in various parts of the industry," particularly in areas in which many other banks do not excel, like commercial cards and merchant processing, Mr. Phillips said.

Industry observers are intrigued at how those strengths might be combined.

"The interesting thing will be what happens to the credit card business, because neither of them alone qualifies as a powerhouse," said Frances Dale, president of Entandem Inc., a Sterling, Va.-based consulting firm.

Joseph Morford, an analyst with Van Kasper & Co., said the card business requires increasingly large investments to support technology and marketing. "I think one of the positives of the merger is that it allows (BankAmerica) to defray these costs over a larger customer base," he said.

Size may not mean everything to Mr. Phillips, but he pointed to potential synergies that few others are big enough to exploit: "Whether it is an ATM or physical channel, the integration of experience across product lines is something we will be able to do better than any other banking institution."

And he conceded that the new BankAmerica will not be satisfied with being only No. 5 in terms of receivables.

"If there are only eight major players, being fifth five years from now might be O.K. - as long as the distance between you and the No. 1 player is not that great," Mr. Phillips said. "But we don't even know what being fifth will mean in the future."

Mr. Morford does not see BankAmerica becoming one of the top three, however.

But as the largest debit card issuer, a function of its retail banking prowess, the Charlotte, N.C.-based company will have "enormous influence," said David Robertson, president of the industry newsletter The Nilson Report.

The post-merger company would jump ahead of Banc One Corp.'s Paymentech subsidiary into third place among merchant processors, with $47.3 billion of annual transaction volume. BankAmerica's BA Merchant Services was chosen to handle the merchant-acquiring side of the business. The fate of NationsBank's joint venture with First Data Corp., Unified Merchant Services, was unclear.

Credit cards had been just part of Mr. Phillips' most recent management portfolio at NationsBank. But he is a director of Visa U.S.A. and Visa International, a sign of his high level of attention to the business.

Mr. Phillips, 48, joined NationsBank 25 years ago. An MBA graduate of the Darden School at the University of Virginia, he has been widely regarded as a rising star.

Not waiting for the anticipated consummation of the merger in October, Mr. Phillips recently named six top members of his credit card team, distributing responsibilities for such functions as risk control, technology, marketing, commercial cards, merchant services, and debit and smart cards.

Eileen M. Friars, as president of card services for NationsBank, had been overseeing all the functions except smart and debit cards. It was necessary to split them further, Mr. Phillips said, because the new BankAmerica credit card portfolio will be twice the size of NationsBank's $9 billion.

Ms. Friars will have marketing and service delivery responsibilities. Her counterpart at BankAmerica, Stephen Galasso, did not get a role in the merged entity.

Another significant early decision by Mr. Phillips was to retain NationsBank's operations center in Charlotte as well as BankAmerica's in Phoenix.

He said his initial marketing targets would be the 50% to 70% of customers of both banks who have at least one banking relationship with them but no credit cards.

Only 20% of NationsBank's customers carry its credit card; BankAmerica has 50% penetration.

The new BankAmerica will have hooks into 29 million households in 22 states. Mr. Phillips expects the cross-sold card customers to be particularly loyal because they will have several relationships with the company.

Moreover, he said, the nationwide marketing of credit cards should be more fruitful because consumers are more receptive to offers from banks that have offices near where they live.

"Both companies' goal is to build strong customer relationships," Mr. Phillips added. No bank has yet achieved the deep customer connections BankAmerica will be striving for.

"If they mine their customer base well," said Ms. Dale of Entandem, "they could really get into relationship marketing."

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