Since the spring, Visa U.S.A. has been cutting deals with banks that issue its credit cards and merchants that accept them, offering preferential pricing and the benefits of a closer working relationship in exchange for a tilt of loyalty to the Visa brand.

Under what Visa calls its partnership program, a bank making a five-year commitment to issue mostly Visa cards at the expense of MasterCard cards pays lower fees and gets as much personal hand-holding from the association as it wants.

About 200 banks have signed up since April, accounting for 50% of Visa U.S.A. transaction volume, said the organization's president, Carl Pascarella. Those participants include 15 of the top 20 banks in Visa volume.

The bank partners have agreed to put the Visa brand on up to 90% of credit cards they issue, commitments that promise a long-term boost in Visa's already solid market share, Mr. Pascarella said.

Becoming a partner "formalizes and solidifies our relationship with that bank," Mr. Pascarella said in an interview last week. "We can make sure you lower your costs and increase your bottom-line profitability, so that you can go to your analysts and say, 'I'm locking in these things, I know what my Visa costs are going to be.' "

Visa's aggressiveness could have implications for the antitrust lawsuit that the Department of Justice has filed against Visa and MasterCard International.

Government prosecutors have charged that bank credit card duality the practice of issuing both card brands has stifled competition. Among the Justice Department's demands has been that banks represented on Visa's or MasterCard's boards of directors commit to issuing a preponderance of cards in that chosen brand.

The Visa partnership program for banks looks like a play for that kind of loyalty, but Visa officials decline to discuss the pending litigation in federal court in New York, and the Justice Department declined to comment.

Similarly, Visa's policies for merchants introduced shortly before the partnership program for banks could be seen as an answer to blunt criticism and legal challenges from the retail community. Visa said it has enrolled 75 of the top 100 retailing companies in a program that gives lower interchange rates in exchange for preferential promotion of Visa at points of sale and elsewhere.

The merchant program -- which Mr. Pascarella said was a "huge change" from earlier policies -- includes a tiered interchange system that rewards larger-volume retailers with lower fees. "We have historically priced to merchants on a flat basis," he said. "Whether you had $1 billion or $10 billion in acquiring business or sales with us, it was the same."

In exchange for volume discounts and other breaks, the merchants agree to encourage customers to use Visa cards, or to collaborate on advertising campaigns.

He would not give names of partner merchants, but he acknowledged that there is some overlap between that group and the list of plaintiffs in what is generally called the Wal-Mart case, a challenge to Visa and MasterCard debit card policies that is filed in U.S. District Court for the Eastern District of New York. The suit focuses on charges for off-line debit payments. Prosecutors in the federal antitrust case have been using some of the same evidence and arguments.

"The litigation aside, Wal-Mart is still a huge customer of ours, and we want to treat them very well," Mr. Pascarella said. "Litigation is one thing, but we've got to make sure we optimize our business relationship and do everything we can to keep the business running." Wal-Mart Stores Inc. is not in the partnership program, he said.

By forging closer ties to merchants and banks in its corner, Visa is trying to break "the old association kind of model" that had "one size fits all" policies, Mr. Pascarella said.

Each bank is assigned one or more relationship managers from Visa's new "sales and solutions" division, which is headed by executive vice president Bond Isaacson. On top of the price breaks on membership fees, processing, and other services, the partner banks can get customized consulting services from teams of Visa experts.

Mr. Pascarella said the level of attention is much higher for partner banks. "They should be using us almost as an extension of their organization," he said. "I want to have offices at the bank."

Smaller banks are also getting their share of service, Mr. Pascarella said. "It's not just the Bank One's and the Bank of America's, it's right across the board."

Sharon Gamsin, a MasterCard spokeswoman, said Visa's partnership program does not sound different from the deals the card associations have always cut with banks. "Both Visa and MasterCard have agreements with most of the large banks for different pieces or parts of the business," she said.

At MasterCard this kind of dealmaking "is something we've been doing for quite a while," she said. "If you look at our current annual report, there is reference to the numbers of agreements we've signed with members."

Ms. Gamsin said MasterCard's ongoing reorganization, announced in February, seems to accomplish the goals Mr. Pascarella described. "We're focusing on key members, providing customized services, being flexible, and helping customers meet their business goals," she said.

MasterCard president Robert W. Selander said in an American Banker interview in May that his association had repriced its services so that members did not have to pay for things they did not use. "We are separating the way we deal with customers into core services -- the things that every customer needs -- and user-pay services," Mr. Selander said at the time.

Some of the changes at MasterCard took place around the time that Citibank resigned from Visa's board over pricing and other issues. The Citigroup Inc. subsidiary was promptly given a seat on MasterCard's board.

Ms. Gamsin said she saw no evidence that Visa's partnership program had swayed large issuers in its favor. "I don't know that I've seen any of the (other) large banks saying what Citi has said about shifting its portfolio to MasterCard," she said.

Mr. Pascarella said Visa continues to gain market share versus other general-purpose cards, Its figure rose two percentage points, to 54.2%, between June 1998 and June 1999. He added that Visa's share of the bank card market 67.2% -- is an "all-time high."

Despite the break with Citibank, the industry leader "continues to be a very important customer of ours, and we are really happy with the volumes we're seeing," Mr. Pascarella said.

He said Visa representatives are ardently courting banks that have not joined the partnership program, and Citi would surely be one of them.

Visa won't win them all. One banker who received a solicitation letter for Visa's partnership program said the terms were that "90% of the bank's total sales volume is generated on Visa cards, and 100% of the off-line debit has to be Visa, too."

The banker, who runs the credit card program at midsize southern bank, said he declined the offer because it would have been "a significant expense" to switch a predominantly MasterCard debit card program.

One change that Citibank was able to orchestrate through MasterCard that it was not able to accomplish through Visa was permission to move the association logo to the back of its credit cards.

Mr. Pascarella said he has not seen that happen yet, and, with the atmosphere in the bank card industry "the most competitive I've ever seen," he said issuers will "use the Visa logo more, and leverage what we can do more."

With Visa's holiday promotions, marketing blitz for the National Football League and Super Bowl, and sponsorship of the 2000 Olympics drawing nigh, "I don't know if it's the right time to be looking at card design," Mr. Pascarella said.

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