Visa U.S.A., backing away from its opposition to "duality," has decided not to make member banks chose between itself and MasterCard in issuing commercial cards.
A bylaw requiring such a choice was adopted in 1994 and had been scheduled to take effect this month, San Francisco-based Visa said.
Art Clark, a partner with Business Dynamics Consulting Inc., Nyack, N.Y., said that Visa, by setting a compliance date so far ahead, had left itself the option of dropping the rule.
"Most banks want to make the decisions themselves, and not have it legislated by the associations," added Mr. Clark.
He said he was not surprised by Visa's reversal.
Several large banks, including Citibank and Bank of America, had been issuing commercial cards under both association's brands. Several industry insiders had been predicting that it would be close to impossible for Visa to enforce any antiduality rule, especially against such large players in the commercial card market.
MasterCard has supported duality and continues to do so, said a spokesman.
By the end of the third quarter of 1995, the most recent period for which it could report accurate data, MasterCard had issued 1.4 million commercial cards. Visa reported at the end of 1995 that it had issued 2.3 million.
"Opening the commercial bank card market to duality will allow our members to focus their attention and resources on accelerating segment growth," said Michael Beindorff, executive vice president of product management for Visa.
"Given the strength and value of the Visa brand, we fully expect to capture the lion's share of this new business."