Christopher Rodrigues: Visa is far more than just a card, says its Cambridge Blue boss

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The Independent Online

In 2004, Europe's total card numbers were up by 20.2 per cent, and sales increased 17.1 per cent to over $1 trillion for the first time. In comparison, Visa's global cardholder spend increased 14 per cent over the same period. But its global turnover of $3.4 trillion still only represents 8.4 per cent of the total $24 trillion global personal consumption expenditure (PCE). PCE is the amount spent on goods and services by individuals, and 80 per cent of this is spent using paper payments.

Rodrigues, 55, is realistic about the prospects of change: "Cash and cheques are still Visa's main competitors and probably still will be well beyond my lifetime."

He speaks in a deep, theatrical voice and, standing 6ft 2in, has a commanding presence that may owe something to his family background - he is the son of two ballet dancers - and his distinguished history as a sportsman. While at Cambridge, the rowing-mad Rodrigues was a member of the winning team in both the 1970 and 1971 university boat races, and he is still chairman of the company that runs the annual event.

Rodrigues's management skills were honed at Harvard, but his big break and first brush with credit came when American Express headhunted him to run its travel management department. He has a knack of springing from one top job to the next, which began when he left Amex to join Thomas Cook in 1998. He became the company's chief executive but was ousted after the German bank WestLB took over the travel operator. Rodrigues says he was fired because the bank wanted a German at the head of the firm. Being of Portuguese extraction, this was one mission he could not accomplish.

But Rodrigues landed on his feet, this time at the building society Bradford & Bingley, which demutualised and became a FTSE 100 bank with him at the helm. He embarked on an aggressive acquisition spree, buying estate agencies, specialised lenders and John Charcol, the UK's largest mortgage broker, but his management school methods reportedly grated with some of the more straightforward Yorkshiremen among his colleagues. B&B's rivals were drilling down costs, concentrating on offering cheap loan products and posting record profits. Rodrigues's strategy was unravelled as soon as he left, and B&B has since sold Charcol, as well as a building surveying company and two independent financial advisory firms, at the cost of 3,500 jobs and a loss of £175m to B&B.

Lured to Visa's HQ in San Francisco, Rodrigues is the latest in a line of UK bank bosses who have moved to US credit card companies. Since these have a similar ownership structure to mutuals, his years running B&B have given him highly relevant experience.

Visa isn't a listed company and, unlike MasterCard, which announced plans to float earlier this year, it has no intention of changing that. It is owned by 21,000 banks, which issue and market their own Visa products. Visa was formed in 1977 by National BankAmericard to create a credit card that could be used in countries outside the US. The plan paid off, and business was soon booming internationally. Europe is now home to 282 million Visa cardholders.

Rodrigues is clear about what is driving Visa's growth: "It's growing at such a rapid rate because what was originally thought of as a credit card is now seen as an electronic payment system," he says. Visa's business now involves three types of card, reflecting a world where the consumer is king. To pay now, Visa has debit cards; to pay later, credit cards; and to pay in advance, it has a new line of prepaid cards that are targeted at groups who wouldn't normally qualify for credit cards - under 18s and people with poor credit records.

Surprisingly, Visa's biggest gains have been in the debit sector. In the past two years, debit card volumes have not only surpassed credit volumes but have grown almost three times as fast. Over half of Visa's card volume ($1.8 trillion) is on debit cards, and this business is growing 20 per cent year-on-year, compared with 7 per cent for credit.

"It's quicker to use a debit card than it is to write a cheque," says Rodrigues, explaining Visa's success in the sector. In addition, debit cards are safer to use than cash and cheques, while retailers get guaranteed payments, leading to lower cash handling costs. Debit also reaches out to consumers who wouldn't normally be given credit. However, Rodrigues is banking on R&D to grab a greater share from cash in future.

One of Visa's latest developments, he says, is a card containing a radio chip: "You don't have to swipe it through a machine or physically enter the data. There is a radio terminal and you just wave your card in front of it and it downloads your data." Security is enhanced in comparison with traditional cards, since the radio-chipped card never leaves the customer's possession - but the biggest benefit is speed. "You can do a contactless card transaction faster than you can make change," says Rodrigues.

Next on Visa's horizon is to create multi-application smart cards that will do anything from giving the user access to a building, to letting them travel by public transport, or enjoy the benefits of a loyalty scheme. And the cards of the future won't just hold different data; they'll look different too. A Visa "card" measuring only 40mm by 66mm and capable of being attached to a keyring is currently being tested in Asia.

Much of the new technology is aimed at tackling fraud. Visa cards are now protected by features such as chip and pin while, more recently, the company introduced Verified by Visa, a secure online payment system requiring cardholders to register their details. Developments such as these appear to be paying off. "The good news is that, globally, Visa fraud statistics have dropped from 0.15 per cent of our business in 1992 to 0.07 per cent," says Rodrigues.

But, as for creating a cashless economy, there's still a long way to go before Visa puts wallet makers out of business.


AGE 55


BA (Hons) in economics and economic history from Cambridge University; MBA with distinction from Harvard Business School.


1974-79: McKinsey & Company.

1979-88: American Express travel and travel management services.

1988-96: chief operating officer and later chief executive, Thomas Cook.

1996-2004: group chief executive, Bradford & Bingley.

2004 to now: president

and chief executive, Visa International.