Visa International's president is giving no ground to rivals who attack its rules are anticompetitive.
In speeches and press conferences during Visa directors meetings this week, Edmund P. Jensen held Visa up as one of the great success stories in global brand power and customer service, the result of cooperation among some 20,000 member institutions.
He defiantly warned those members against alliances with American Express Co., the most vocal of the nonbank critics that have complained about Visa's prohibiting member banks from offering a competing card.
"Your Visa brand is now stronger than all competitive brands put together," Mr. Jensen said. "Let us leverage it and not dilute it."
He mentioned only American Express by name, though Dean Witter, Discover & Co., and Citicorp's Diners Club subsidiary have filed formal antitrust complaints in Europe against Visa's proposed membership restriction. Visa has not actually enacted such a bylaw in Europe but has done so in the United States, where American Express chairman Harvey Golub recently invited banks to withdraw from Visa to get the right to offer joint card products with his company.
Mr. Jensen rested his case on the fact that Visa bylaws and initiatives are ratified by boards of senior-level banker-directors, which seemed to stand solidly behind him this week at the annual meeting where Visa's international and regional boards come together.
Critics like Mr. Golub have described these bodies as elite clubs that are more interested in protecting their markets and narrow interests than in truly free competition. But Mr. Jensen and other Visa officials defend their structures as democratic and their boards as representative of all banks, large and small.
"As for nonmember brands like American Express, they are outside the rules members have so diligently woven into their association," Mr. Jensen said. "If that were not important, members would relax the rules, allowing the Visa brand to be used by all, anywhere, anyhow."
Mr. Jensen would not discuss any actions under consideration in closed board meetings, which were continuing through Wednesday, to address the nonbanks' complaints. But privately he expressed confidence that Visa would put the legal concerns to rest.
"There is a huge difference between Visa and American Express," Mr. Jensen said in his speech Monday to the bank card association's leadership group. "Visa is an acceptance brand, which adds value to members' relationship brands. American Express is a relationship brand competing directly with member brands."
Allying with American Express "is to help your competitor build a global financial services brand, which only a handful of banks, if that many, have been able to do," the Visa chief executive said.
"Trojan horses no longer look like horses," Mr. Jensen added, using ancient imagery that brings to mind the American Express centurion symbol. "The horse that you are on today (Visa) is a winning one, not a subterfuge."
Invoking the Olympics - Mr. Jensen's right because Visa is an official sponsor of the games - he said, "While you are successful individually, you have also found greater strength through collective action. You have made the Visa brand a symbol of exceptional value ... Like the interlocking rings of the Olympic flag, your (bank) brands linked with your Visa brand are universally recognized and accepted."
As if to answer the criticism that Visa may have grown too aloof or powerful for its members' good, Mr. Jensen repeatedly described its mission as "enabling and facilitating." And he showed a specially produced video, "Imagine a World Without Visa," which illustrated the confusion of incompatible payment systems and suggested Visa is a global, unifying force, if not a currency in its own right.
And as if to underscore his emphasis on brand strength, Mr. Jensen trotted out as guest speaker Peter Sealey, a consultant and marketing professor at University of California, Berkeley, and a former senior executive at Coca-Cola.
Mr. Sealey ranked Visa "right up with Coke and Sony" in global brand recognition and said that as a symbol of trust and reliability it can help banks and their customers make the transition from physical to electronic commerce.
"The Visa trademark is worth more than all your technology," he told the Visa bankers. "Treasure that brand, honor it, continue to enhance it and protect it. It is your passport to the future."
Conversations with Visa directors from the United States revealed little agonizing about Mr. Golub's complaints or proposals.
Scott Marks, vice chairman of First Chicago NBD Corp., said there was no likelihood of its offering an American Express product. Lee Chaplin, head of consumer banking at Barnett Banks Inc., said he saw American Express' pitch to banks as a sign of desperation in the face of Visa's "superior value proposition and market share."
Gianni Testoni, chief executive of Deutsche Bank in Milan and a Visa International director, said the European Commission is likely to insist on open competition, and bankers support that principle. But he also said he could not imagine banks' making arrangements with American Express that line its pockets at the banks' expense.
No endorsement of Visa or vote of confidence in Mr. Jensen was more resounding than that of Peter Ellwood, chairman of the international board and deputy group chief executive of Lloyds TSB Group in London.
He described Visa as "perhaps the most successful organization in the world." He said if Visa were "neutralized" and relegated to the status of an ineffectual trade association, then " we would be significantly worse off and would be guilty of failing to capitalize on an asset that we, together, have built over 30 years."
"Keep the American Express situation in perspective," Mr. Ellwood said at a press conference. He said that with a market value of $22 billion and 1995 profit of $1.5 billion, it is no underdog. But at 500 million cards, Visa members collectively have more than 10 times Amex's card base, and Visa's $800 billion of annual volume is more times Amex's.
Asked how banks in Europe view the controversy, he said, "They like what they've got. Visa is their company. Amex is not their company."
