In his mild-manner way, Visa U.S.A.'s new president came out swinging last week.
Thrust into the limelight of the national bank card conference only three weeks after taking the job, Carl F. Pascarella presented himself as a breath of fresh air, foe of bureaucracy, and guardian of his member institutions' interests.
"I'm not necessary looking to put my personal stamp on the U.S.," Mr. Pascarella said in his first lengthy interview with the American Banker. "I want Visa to be as successful as possible so that our members make the most money."
Moments before a relaxed Mr. Pascarella made that comment, he had completed his first appearance as spokesman for Visa U.S.A. at the card conference sponsored by the American Bankers Association.
On Aug. 30, he was tapped to move from Tokyo, where he headed Visa's Asia/Pacific region, to succeed H. Robert Heller, who had abruptly resigned as president of Visa U.S.A.
Mr. Pascarella, who is 50 years old, said he spent most of his time last week meeting with dozens of people -- a task that might have taken months were it not for the convention. He said he needed the immersion.
His 10 years with Visa in Asia, and a banking career at several U.S. institutions before that, are an asset. He is already highly regarded by the staff and is a close friend of Visa International president Charles T. Russell. But Mr. Pascarella said that until this month, his main point of contact with the American card industry had been management meetings.
Out of the whirlwind, he said came a clear message: "Listen to the members, and be consistent."
Ear to the Ground
The implication was that Visa is at least in danger of losing touch with its members and their concerns. Mr. Pascarella, who spent 50% to 60% of his time on the road in Asia staying close to members and their markets, pledged not to lose that focus.
"I'm very proactive about getting out with the members and focusing on their needs -- entirely on what makes sense for them," he said in the interview.
His "state of the association" speech, following that of MasterCard U.S. president Peter S.P. Dimsey, was pointed but low key. Holding himself out as proof of "how quickly things can change" -- he had spent only four days in his new office -- Mr. Pascarella drew the conclusion that "Visa provides the most dominant brand, the widest range of products, and the most efficient and effective systems in the industry."
He closed by asking his members for "input ... and support. And I am giving you my commitment to make your relationship with Visa an even greater and more profitable venture in the future." (For other excerpts from the speech, see next page.)
The speech included some rejoinders to Mr. Dimsey.
Mr. Pascarella questioned Mr. Dimsey's assertion that MasterCard has a stronger brand identity, accused MasterCard's home banking program of taking control away from the banks, and said Visa's technology and security measures are ahead of MasterCard's.
The Visa executive also attacked MasterCard's claim to superiority in debit cards. Mr. Dimsey emphasized the number of cards committed to MasterCard's Maestro program -- 100 million worldwide, 16 million in the U.S. -- but Visa contends the current total of cards issued, and the participating banks' share of total deposits, is more valid.
|Nine-to-One' Advantage Cited
"Visa introduced a two-tiered debit program to optimize member profitability," Mr. Pascarella said. "You embraced the strategy by issuing 13 million Visa Check cards that generate the highest return in the debit arena, and 21 million Interlink cards.
"This gives us a nine-to-one debit card advantage ... Further, your commitment represents 70% of the U.S. deposit base, and let me remind you, this is a nondual decision," meaning a bank can have only one debit association, in contrast to credit card "duality."
In the subsequent interview, when the topic turned to market share, Mr. Pascarella's gloves were decidedly off.
"I was told that MasterCard is moving market share in the U.S.," Mr. Pascarella said. But when he looked at the numbers, the cobranded cards of American Telephone and Telegraph Co. and General Motors Corp. made up "all but $5 billion of MasterCard growth" in the first half of this year.
AT&T Program Downplayed
He dismissed AT&T as "a pass-through program" that does not amount to true bank card volume and does not benefit the commercial banking system.
"I'm not saying [MasterCard is] right or wrong, but do you build real growth cobranding, or by getting your own, grass-roots growth through extended services or extended use of your cards?
"If you look at the bottom line, the numbers are not so bad: If MasterCard's growth was only $5 billion, we still had a three-to-one advantage," Mr. Pascarella said.
MasterCard's view, which gave it its current lead in cobranding, was that cobranding expanded the card business and bank's opportunities within it. Concerned about banks' and card associations' not being adequately compensated for their investments in the industry's infrastructure, Visa had imposed a temporary moratorium on cobranding.
Mr. Pascarella said he is satisfied that the cobranding issues have been addressed, and he is ready to compete head-on.
In the speech he said Visa is "definitely in the cobranding business."
"Make no mistake, I am a proponent of cobranding," he said in the interview later. "We had cobranding programs in Asia.
"It has to have a direction and you have to have an objective -- not just numbers of cards, but in terms of the revenue stream for members."
The controversies and the competition won't faze an executive who built Visa's Far Eastern organization almost from scratch and who has dealt with more than his share of complexity.
Engineer of Growth
He arrived in Singapore as assistant chief general manager in 1983, when Visa had that one office and four million cards in circulation. The region has since grown to 75 million cards -- half the U.S. total -- and eight offices, with headquarters in Tokyo.
From Australia to Japan, and from Korea to Thailand, variations in languages, cultures, and business practices make the U.S. market seem downright stable. Some countries adopted dual MasterCard and Visa issuance, others did not. In some areas, Visa was prohibited from mentioning competitors in its advertising.
Mr. Pascarella views the U.S. as "more homogeneous." And while Asia is generally viewed as being in an earlier, faster-growth stage of credit card life, he said, "We had mature markets too."