May 28 2004 : Visa USA is targeting untapped cashless payment markets to give consumers more value and grow its share of the US market for credit and debit cards, which the Nilson Report indicates to be 50.4 per cent. Just recently, Carl Pascarella, CEO of Visa USA, was quoted by the SF Gate as saying that Visa was “limited when [it was] just a credit card company”, a statement that reflects its moves into wider markets. Anita Boomstein, lawyer with New York firm Hughes, Hubbard & Reed, also says in the same article that “the creditworthy population has been identified and given as many plastics as they care to absorb”.
In its search for new product niches, Visa USA is exploring the unbanked, government and small-value markets, particularly in California, where USD 40 of every USD 100 spent by consumers, is on plastic, versus USD 36 in other US states. Moreover, California accounts for 15 per cent of Visa card spending in new acceptance markets such as small-ticket items, although it holds 15 per cent of the US population. Across the US in 2003, Visa cards were used for USD 1.2 billion in movie tickets, USD 6.5 billion in fast-food orders and USD 50.6 billion in recurring bills, which proves the case for Visa’s market expansion.
New credit card acceptance programs by cab drivers in Chicago, New York and other US cities will push up Visa’s transaction volume, while catalyzing credit card use by consumers. Visa will also benefit from the rollout of payment card-enabled parking meters in several US cities, particularly as debit cards are a strong growth area for Visa. Figures from the Nilson Report show debit cards to have accounted for 40 per cent of total dollar volume at end-2003, and 51 per cent of transactions. Visa is also using debit cards as a basis for payroll card and to enable government agencies in the US to disburse welfare payments.
San Francisco Gate
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