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Visa Does Not Issue Cards or Extend Credit.

posted by Adam Levitin

The Union Station Metro station in DC is plastered with Visa ads.  Currency of Progress, Visa is a Payment Technology Company, etc.  But among the ones that was featured was this beauty:

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One rarely sees such a defensive ad.  When was the last time you saw a company advertising what it does not do?  That bespeaks a major branding problem.  It might as well have said "I am not a crook" or "We do not harm small furry animals."  The ad is true, but not what one would expect.  (Technically, I don't think the ad is quite true.  Visa doesn't extend consumer credit, but likely extends some sort of daylight overdraft credit to its members due to payments imbalances.) 

Clearly Visa wants to disassociate itself politically with its member banks.  I emphasize politically because the Union Station Metro stop is one of the ones used by Capitol Hill staffers.  I haven't seen this particular barrage elsewhere in the DC Metro, which makes me wonder if it is a targeted campaign aimed at Hill staffers (in DC one also hears card industry radio ads about interchange that aren't aired elsewhere--this is the Beltway bubble). 

What is Visa so concerned about, though?  Financial regulatory reform has largely ignored entities like Visa.  I've got to think that this is about interchange legislation, and this looks like the ad of a company that is running scared. 


The ads are also posted in the Capitol South metro station.

That would fit with my theory that these ads are aimed at Hill staff.

From Rortybomb at http://rortybomb.wordpress.com/2010/01/07/visa-and-those-fees-ii-for-the-activists/ discussing this post:
"As Levitin brought up, how often do you see an company advertise what it doesn’t do? I wrote a blog post about Visa’s Financial Football program last November that incorrectly implied that Visa lent credit (a sloppy mistake on my part), and within days Visa contacted me so that the post could be corrected. For a blog post. They are worried about protecting these profits."

The entire post is worth a read

Went to a conference this weekend in Houston on Hospitality Law, and one of the presentations was on the credit cards, which make up a vast majority of payments in hotels. Two points stuck out to me: 1. Even large corporations, i.e. Marriott, Hilton, etc. have no negotiating power in these credit card agreements. Visa and Mastercard and the issuing banks have their fees and since they have the entire market, they are going to get their fees. The reverse competition from issuing banks makes this completely insane. Visa raises fees, so Master Card follows suit, just weird. 2. The question of the day to which the answer was pretty convoluded, "What do Visa and MasterCard do?"

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