Top Mall Developer Pushes Payment by Visa

The country's largest developer of shopping malls, Simon DeBartolo Group, is endorsing Visa U.S.A. as its preferred payment method and stocking its properties with advanced automated teller machines.

Visa will be the "card of choice" in Simon DeBartolo's 131 enclosed shopping centers as a result of a three-year marketing pact.

To promote the alliance, Visa will offer special discounts and rewards to cardholders when they make purchases from stores in the malls.

Last month Visa launched a summer promotion for gold card to reward them for shopping at stores on eight famed shopping streets, including Rodeo Drive in Beverly Hills and Madison Avenue in New York.

But the Simon DeBartolo program is more significant, said Thomas Edwards, the San Francisco-based card association's senior vice president of market development and acceptance. Not only is it on a larger scale, he said, but it also will bring new products and services and exclusive offers to Visa cardholders.

Rumors have abounded for months that several real estate developers were in talks with Visa U.S.A. and MasterCard International to issue cobranded cards as mall-loyalty promotions.

Instead of tying such cards to a single issuer, the Visa approach does not favor any one bank and relies on uniform marketing of the brand to appeal to a broad base of cardholders.

A single-bank cobranding venture "that offers benefits from several different retailers is definitely something we are looking at, but we have nothing to announce right now," said Kris Bondi, a spokeswoman for Visa.

Launching such an entirely new card would be a stretch, said Stanley Anderson, president of Arvada, Colo.-based Anderson & Associates. It would be costly to develop designs and logos and change point of sale materials.

Visa expects to do promotional tie-ins-such as sweepstakes and discounts-between the shopping centers and its other sponsorships, including the National Football League, the Olympic Games, and the Read Me A Story literacy program.

"It is a coup for the retailers who reside in those malls," said Mr. Edwards. "They can now give customers benefits just for using their Visa cards."

Mr. Anderson said another bonus for Visa is that signs indicating "we prefer Visa" almost imply that it is the only card accepted.

The subtlety of promotions like this has been very successful in growing volume," he said.

Mr. Edwards said the average Visa transaction is clearly higher than cash, check, private label, or MasterCard transactions done in malls, and the program will tend to generate increased sales for retailers.

But Mr. Anderson said a barrier for the program is that some shop owners probably have private-label credit cards and may not want to give Visa an extra push at the point of sale.

Retailers have the option of accepting Visa's signage.

With Visa being promoted heavily in the public areas of the malls, other brands will find it difficult to counteract the advertising, other than at the point of sale, Mr. Anderson said.

"Visa costs the merchant less to accept and prefer, and we provide value for every transaction made, ' said Mr. Edwards. "It would behoove the merchant to take advantage of this free promotional opportunity."

In the future, Visa wants to work with Indianapolis-based Simon DeBartolo and the merchants in the mall to create test sites for products like smart cards.

For the ATM installations, Simon DeBartolo has aligned itself with New York-based Americash to install 300 Diebold machines by yearend.

Besides cash, the machines will dispense prepaid long distance phone cards and mall gift certificates.

A surcharge of $1.50 per transaction will be tacked on to cash withdrawals and the gift certificates.

All 186 DeBartolo shopping center properties will be affected, including the open-air variety. The traffic for all those sites totals 1.4 billion visitors a year.

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