With its appointment of a new chief executive, Visa International cleared up nagging questions about its future. management team and signaled an intention to become more aggressive in the U.S. market.
Late Tuesday evening Visa named Edmund P. Jensen, a vice chairman of U.S. Bancorp, as its president and chief executive, effective Jan. 2.
Mr. Jensen, 56, will succeed longtime CEO Charles T. Russell, who will remain as a consultant until next June. Mr. Russell, 63, had previously spoken of a desire to retire, but had not set a date.
Turnover at the Top
The question of who would succeed Mr. Russell has long dogged the organization. Two months ago, H. Robert Heller, abruptly resigned, becoming the third heir apparent to leave in the past decade. He was replaced as president of the U.S. region by Carl Pascarella, the head of Visa's Asian operations.
Mr. Jensen's appointment means that Visa, the world's largest credit card organization, will now go forward with two new ranking executives.
Game of Catch-Up
While Visa has grown dramatically under Mr. Russell, one chink in its armor has been the U.S. market, the company's largest. Over the past two years, its archrival, MasterCard International, has been growing faster. Last year, MasterCard gained market share on Visa U.S.A. for the first time in 14 years.
Mr. Jensen is expected to step up Visa's domestic marketing efforts, particularly by issuing cards jointly with nonbank marketers, which is known as cobranding.
MasterCard's growth has been tied to its aggressive use of cobranding, and some have blamed Mr. Heller and Mr. Russell for being late to recognize its potential.
Bankers noted that Mr. Jensen's bank, U.S. Bancorp of Portland, Ore., has carved out a niche by jointly marketing cards with such organizations as the Automobile Association of America.
Mr. Jensen himself played a key role in developing a cobranded Visa card with U S West Inc., one of the first to emerge after the association lifted a moratorium on the practice.
"Ed Jensen's appointment sends a strong signal on cobranding," said William Keenan, managing director of the U S West credit card program. "He was party to this happen."
Mr. Jensen has been on the Visa board since last year. His appointment as chief executive and president was announced at a board meeting in Baden-Baden, Germany.
One Visa member expressed relief that the uncertainty surrounding Mr. Russell's succession had been removed. "That takes a toll on an organization," he said. "People don't understand where they fit. There's a lot of jockeying for position and power, and there's a price you pay for that."
As for the loss of market share in the U.S., some experts said Visa's board must accept some of the blame. "Big banks refused to go with cobranding," said David Robertson, president of The Nilson Report, an Oxnard, Calif., newsletter. "They dug their heels in, and Visa's paid the price."
He said Visa could easily regain the lost market share as its banks enter the cobranding fray and its debit card programs take off.
Mr. Russell's departure will end a 23-year career at Visa and its predecessor BankAmericard Inc. He had joined the organization as a vice president of operations in 197 1. Since then, annual payment volume on Visa cards grew from about $4 billion to more than $500 billion.
Since he took the reins in 1984, the association's share of annual card spending internationally has risen to 52% from 41% and the number of Visa cards issued nearly tripled, to more than 300 million.
Mr. Russell also built a global payment system capable of processing 1,100 transactions a second for less than a penny a transaction, the association said.
"The man's got a phenomenal record of accomplishment. I think everybody in the industry would agree to that," said Brian O'Hare, president of Norwest Bancard, a Visa member based in Des Moines.
"Chuck Russell is a giant in the industry," said Alex. W. Hart, Mr. Russell's counterpart at MasterCard.