James F. Partridge, the man who built Visa International's Latin America and Caribbean operation, faces the future warily.
Mr. Partridge, the longest-serving of Visa's regional presidents, planted the flag for the Latin American business unit back in 1980. It has been the fastest-growing of all Visa jurisdictions for the last six years, with charge volume rising at a rate of 40% a year.
But Mr. Partridge and his No. 2 executive, Jonathan Sanchez-Jaimes, are worried that the growth will taper off unless member banks find ways to promote Visa to a wider audience.
He and his colleagues point out that most Latin American banks do business mainly with the affluent, neglecting a large portion of the population. About 60% of the people do not have a banking relationship and therefore are not eligible for credit or debit cards.
"Direct mail is almost nonexistent, because the mail system is very inefficient," Mr. Partridge said. The banks must create demand through advertising "and that results in people coming into the banks to ask for a card."
The lack of credit bureaus in Latin American countries is "one of the greatest impediments" to granting credit, Mr. Partridge added. Economic instability continues to dog a number of countries. And nonbank rival American Express Co. has made inroads by forming partnerships with several major banks in the region.
"The reality is that 40% (growth) is going to be very hard to maintain, and it is going to get harder every year," said Mr. Sanchez-Jaimes, executive vice president of business development and support.
Mr. Sanchez-Jaimes, 36, is in line to succeed Mr. Partridge, 68, who said he plans to retire soon. The coming transition is just another item on Mr. Partridge's task list.
Mr. Sanchez-Jaimes joined Visa a year ago from Boston Consulting Group, where he had worked as a consultant to Visa International. In both jobs he has helped Mr. Partridge restructure the management of the Latin America and Caribbean region to allocate more resources to Visa's strongest markets.
Brazil and Mexico, which account for 50% of the association's charge volume in the region, each have a president who is also an executive vice president of Visa International.
"Brazil and Mexico need more services," said Mr. Partridge, who is based at the regional head office in Miami.
Other countries with significant shares of charge volume are Argentina with 20%, and Colombia with 8%. Venezuela, Chile, and Puerto Rico each have about 3%, and smaller markets account for the remaining 13%.
The recent turmoil in developing countries' financial markets hit Brazil hard. Despite a spike in interest rates resulting in a decline in credit card use, Mr. Sanchez-Jaimes said Visa's growth projections for the country were not affected by the stock market gyrations. "We have always looked at Brazil over the next five years as a major cornerstone in the Latin American economy," said Mr. Sanchez-Jaimes.
Debit cards are crucial to Visa's strategy for getting more cards into the hands of Latin American consumers.
Debit is already growing more quickly in the region than credit. In each of the past two years about 70% of Visa's transaction volume was on debit cards. Of the 43.1 million Visa cards in the region, 19.1 million are debit cards.
Mr. Partridge said Visa does not expect to see that kind of growth continue because it was driven, in part, by banks' feverishly converting automated teller machine cards to Visa's Electron brand. U.S. banks have similarly been converting ATM cards to debit cards with wider point of sale capabilities, in Visa's case Visa Check cards.
As in the United States, debit cards tied to checking accounts are meant to displace cash and checks, but in Latin America they are also supposed to reduce long lines in bank branches.
Latin Americans commonly pay their bills at banks because the postal systems are undependable. Paychecks also tend to be cashed at banks.
Mr. Partridge said, "The banks hope to reduce the costs of their operations by getting rid of checks and the interminable lines of people."
Debit cards are important for other reasons. They help financial institutions offer a plastic product in countries that have limited access to consumer credit reports.
Visa is also developing new products "that are not dependent on the use of a bank account," said Mr. Sanchez-Jaimes.
Within the next 18 months, he said, Visa plans to roll out a "payroll card," serving as a form of direct deposit. Argentina's government recently passed legislation that requires that employees be paid by direct deposit, and Visa is working with banks to facilitate this.
"The idea is that the cardholder becomes comfortable with using this and wants to get a bank account," said Mr. Sanchez-Jaimes.
Even as Visa courts consumers who are out of the banking loop, it is not abandoning its core market.
In October, Visa unveiled a platinum card for people with incomes of $100,000 or more. The minimum credit line is $20,000. Mr. Partridge estimates that there will be 500,000 Visa platinum cards in the Latin America and Caribbean region in three years.
"American Express wants access to the best customers that the banks have, and that is why the banks called us a year ago and told us to develop a product above the gold card," said Mr. Partridge.
In the past year, American Express has forged seven partnerships with some of Visa's largest members in Latin America. Those banks began issuing American Express cards shortly after American Express filed antitrust complaints with government officials in five countries. American Express alleged that Visa had plans to adopt a rule, similar to one in the United States, that would prevent its members from issuing American Express cards.
Mr. Partridge said Visa members were "furious" with American Express because of the unwelcome scrutiny it invited by government agencies.
American Express spokeswoman Elizabeth Coleman said the bankers' ire is "a dead issue. There is a great deal of interest on the part of banks to do business with us."
Nevertheless, Visa seems to be playing the American Express threat down. At the annual meeting of Latin America and Caribbean member banks in October, Visa International chief executive officer Edmund P. Jensen said, "I don't see anything coming out of what American Express is doing as a threat."
Mr. Partridge echoed that view, saying American Express' strategy of offering banks exclusive rights to its cards in a particular market is flawed. "It limits their growth potential," said Mr. Partridge.
Ms. Coleman of American Express said its partnerships with banks are "generally speaking not exclusive."
As the rivalry rages on, Mr. Partridge is preparing for retirement in what he only says is "the not-so-distant future."
Mr. Sanchez-Jaimes was born in Caracas, Venezuela, and raised in Miami. He earned law and MBA degrees from Harvard University and worked at Aetna Insurance Co. for 11 years before joining Boston Consulting Group in 1992.
"I will leave the company in good hands," Mr. Partridge said.