Visa Charges Ahead

By Carl Pascarella; Barbara Kiviat

Americans spent more than $1 trillion on Visa credit, debit and prepaid cards in 2004, a 19% jump over the year before. Visa USA CEO Carl Pascarella sat down with TIME's Barbara Kiviat to talk about the continued march to plastic.

TIME: Where do you look for growth?

PASCARELLA: Everyday expense is growing markedly. That's the grocery store, the movie theater, gas stations. Quick-service restaurants--a $142 billion business, of which the card industry has got about 9%--is growing at 67% a year [for Visa]. We've had significant growth in prepaid cards, and the payroll card is very important to us.

TIME: Courts recently ruled that your member banks can work with other card associations, like American Express and Discover. How is that going to impact your business?

PASCARELLA: There's $19 trillion spent by consumers and businesses on cash and checks. That's ripe for the picking by Visa or any other card. Our banks are going to test some things with American Express and Discover, but if we have the right value proposition, we're going to win.

TIME: The big push toward co-branded cards, like the NASCAR card or the Starbucks card--is that a sign that old-fashioned customer loyalty is crucial to your business?

PASCARELLA: Competition is clearly an issue. There are more banks with a national footprint, so the cost of getting a customer has gone up. Whereas before you only had to mail out two solicitations, now you may have to mail out 10. The more you can tie people to a card [with things like rewards], the more they're going to stay with you.

TIME: Am I going to be able to use my cell phone as a credit card in a store anytime soon, as they do in parts of Asia?

PASCARELLA: Not within the next few months, but because of the proliferation of cell phones, that very well could be one of the devices you use [eventually]. We are also starting work with transponders, like E-ZPass. A cell phone, a PDA, thumbprints, whatever it might be. We're as flexible as the market wants to be.

TIME: How many cards do you have?

PASCARELLA: Seven or eight credit cards and two debit cards. I've got a lot of banks on the board.