Visa's new chief puts everything on the table.

Even by the speedy standards of the bank card business, it didn't take long for Edmund P. Jensen to make his mark on Visa International.

Not yet six months into his tenure as president and chief executive officer, Mr. Jensen left no doubt last week, at Visa's annual meeting, that the No. 1 card association is on a different course.

To hear him tell it, the change has less to do with the man at the top than with the realities of competition and technology. But the meeting in the Mexican resort of Cancun, attended by at least 700 senior bank executives, was clearly Mr. Jensen's show.

Regional Approach

Ironically, it may have been the last of its kind: Mr. Jensen has decided to deemphasize the big international affair. It will be scaled back to a joint meeting of international and regional boards; the savings will be poured into a series of regional events where, he said, "more members will have easy access."

That decision alone indicates there is a fresh breeze blowing through Visa International and, by all accounts, through its five semi-autonomous groupings around the world.

The former vice chairman of U.S. Bancorp in Oregon wasted no opportunity -- whether speaking to the global assemblage of members or to small groups of reporters -- to marvel at how far Visa has come and at the challenges ahead.

But behind his wide-eyed and self-effacing demeanor is a personality in contrast to that of his predecessor, Charles T. Russell, and forceful enough to be filtering through the entire company.

The Big Picture

Like Mr. Russell, Mr. Jensen, 57, relishes the competitive fray. While he had some pointed comments about MasterCard and various forms of potential competition, Mr. Jensen said he preferred to train his sights on "a bigger opportunity": the more than 90% of consumer spending that is not done with cards.

And in another, more immediately tangible aspect of organizational change, Mr. Jensen has modified the decentralized approach that the more systems-oriented Mr. Russell helped implement in the 1980s. Mr. Jensen, with board approval, formed a management executive committee that meets monthly, consisting of his five regional presidents and five top staff executives at headquarters in San Francisco.

"You can't have a fragmented company if you are going to be a global payment system," Mr. Jensen said.

Rallying Cry

The motto he adopted for the coordination, an echo of Visa's "One World, One Currency" rallying cry, is "One Company, One Visa."

Mr. Jensen does not shy away from acknowledging the changes and contrasts. But he has engineered them with a staff that he incessantly praises, and his brain trust -- the management executive committee -- consists almost entirely of holdovers from the last regime who openly embrace Mr. Jensen and his vision.

"Just because there is a change here doesn't mean it was wrong before," Mr. Jensen said. What went before was "exactly right for the times."

Besides, he said, he learned from his experience in turning around troubled companies that "one never points fingers at past management. . . We don't have time to look back."

Looking to the Future

Mr. Jensen is decidedly future focused. He said that to be strategically effective, he must look out five to 10 years, "otherwise I am just extrapolating what we have now."

In that vein, he has raised the possibility that Visa may be unrecognizable in 10 years -- an idea that may have come as a shock a few months ago, but that may now be a natural part of the institutional thinking.

"The form of the industry will be so different over that time that the shape and form of Visa will also have to change," Mr. Jensen said. "Whether it will still be an association, I can't answer, but that question would certainly be on the table."

You be the judge of what he means by that. He is not ready to commit himself, but the wheels are definitely turning.

Thoughts on Cobranding

In his speech to an audience eager to hear his first major, public pronouncements as CEO, Mr. Jensen raised several possibly leading questions:

* On cobranding with non-banks, the source of MasterCard's recent gains against Visa in credit card market share, Mr. Jensen wondered about the benefits to banks. "There have been volume shifts in the industry, and perhaps volume growth" attributable to cobranding, he said. "But its ability to increase profits and loan balances for the industry is still to be determined."

He said Visa, still holding a majority of the card market, should feel gratified that it didn't lose more than a couple of market share points, given MasterCard's head start in cobranding and the additional marketing muscle that nonbanks brought to those partnerships.

He underscored Visa's new openness to cobranding, and said members should seize the opportunity to find ways of adding "real value" to cards, beyond the common price incentives and discounts that may limit the potential returns.

* On new forms of competition, Mr. Jensen urged bankers to "respond to a rapidly changing industry profile." He listed third-party processing companies, telecommunications companies, and retailers as potential competitors.

Strategic Alliances

Asked later to elaborate, Mr. Jensen said these entities are not necessarily enemies, but are "people capable of doing the same things we do." He said Visa, itself a telecommunications provider, must be aware of alliances such as that between BellSouth and Electronic Data Systems Corp., and between the Japanese phone company NTT and the credit card company JCB, and how they might affect the payments business.

* On competition within the bank card industry, Mr. Jensen performed some self-criticism. The MasterCard-Visa rivalry has caused an emphasis on performance data that may not be relevant or helpful to member banks, he said, and may divert attention from more critical external threats and opportunities.

The volume statistics produced by MasterCard and Visa are not always comparable, and when they are compared, each association will tend to "glorify itself," Mr. Jensen said, rather than act in the members' best interests.

Their focus, he suggested, should be on the 86% of worldwide consumer debt or the 93% of personal consumption expenditures not yet on cards.

To be sure, there was some MasterCard-bashing. Mr. Jensen said Visa's investments in the Payment Service 2000 system upgrade and the Card Verification Value antifraud technique have left MasterCard behind, its members "paying twice for the same thing" they could have gotten months or years earlier through Visa.

Smarter Cards

And he claimed Visa is similarly "leading the charge" into prepaid and smart card products and is doing a better job of being "vigilant of interlopers and new competitors who threaten [bankers'] payment franchise."

But Mr. Jensen's speech included an olive branch to MasterCard. He suggested that the two associations discuss ways to make their statistical reports more accurate, perhaps without the customary attention to gross volumes and market shares.

"There is lots we need to talk about. We are very open to it," Mr. Jensen told a group of reporters during the Cancun meeting. (Mr. Jensen's and Visa's openness extends to journalists, who were not invited to recent annual business meetings.)

If the two associations cannot agree on common benchmarks, Visa will do its part anyway, he said.

"I don't have all the answers yet," Mr. Jensen said. But the measurements could include credit and debit card market penetration, consumer product preferences and satisfaction, and member banks' preferences and satisfaction.

All-Round Competitor

While volumes and market shares have some value, he said, "it strikes me that there are many companies with low market shares that have high stock multiples, and there are many successful companies with low multiples.

"Compete with all other providers at being the best at what you do, and you can end up with a performance and market advantage."

Apprised on Thursday of Mr. Jensen's comments last Tuesday, MasterCard International chief executive H. Eugene Lockhart revealed that representatives of the two staffs had begun discussing the numbers issues in meetings the week before. He had nothing conclusive to report, but the conferees presumably learned all the associations' different definitions of "dollar volume."

"I would agree with many of the points [Mr. Jensen] made," Mr. Lockhart said. "There is more to life than market share points."

But Mr. Lockhart does not entirely downplay market shares. "People vote with their feet," he said. Share numbers are "a manifestation of choices" made by consumers and their banks. "I agree that share is only one dimension, but it is an important one."

He said he is receptive to having an outside party monitor and produce reports on industry performance, once the two sides have agreed on a "consistent taxonomy."

MasterCard's mission statement, Mr. Lockhart pointed out, talks about being "the best payment franchise," in essence by "building member profitability."

Visa's statement is similar, talking about expanding members' profits by being "the best provider of global payment services."

"That's interesting," Mr. Lockhart said. "That tells me we may already have some common ground."

He hasn't yet met his counterpart at Visa. "We've probably been trailing each other around the world, but we haven't crossed paths yet," Mr. Lockhart said. "It's about time we did. I'd like to."

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