Bank Systems & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Channels

11:55 AM
Connect Directly
RSS
E-Mail
50%
50%

New Faces in Payment Cards

What if they changed the portraits on the $5, $10 and $20 bills to William Henry Harrison, Franklin Pierce and Warren Harding—and nobody noticed? In 2006, expect higher-profile changes in the payments space—and greater incentives for consumers to use cards rather than cash at the point of sale. With their contactless card initiatives and other micropayments strategies, card issuers are trying to expand their businesses by capturing from cash a larger share of small-ticket transactions. This will be particularly important if economic factors contribute to a decline in purchases of big-ticket items.

This year, consumers' wallets will contain other unfamiliar faces—or at least unfamiliar brand combinations. Stemming from the settlement of the lawsuit against the associations' "exclusionary rules," Citibank (New York; $1.48 trillion in assets) and Bank of America (Charlotte, N.C.; $1.11 trillion in assets) both will issue American Express (New York) cards, giving those banks additional chances to become the payment vehicle of choice. Discover also should benefit from the greater partnership options, now that Morgan Stanley (New York) CEO John Mack seemingly has laid to rest the will-they-or-won't-they-divest question. And consumers with less-than-perfect credit may see a new offering in the mail, with JPMorgan Chase (New York; $1.16 trillion in assets) expanding its presence in subprime cards. The bank also is promoting the affinity card relationships that came as part of the dowry with its Bank One merger.

There also will be new faces on the Visa (San Francisco) board of directors, which, under the new leadership of CEO John Coughlan, is restructuring to include a greater number of independent directors. And finally, there will be a new name in many investors' portfolios when MasterCard (Purchase, N.Y.) goes through with its pending IPO. That very well may entice new faces into the payments industry—think telecom, Internet or both—who believe that they can find a way to make some hay out of a global payments brand. --Ivan Schneider

Register for Bank Systems & Technology Newsletters
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.