Consumer Payment Card News

Chase Buys Bell Atlantic VISA

A new Bell Atlantic credit card will be issued next year as a result of the agreement announced Thursday between Bell Atlantic and Chase Manhattan Bank. The announcement follows last weeks merger between Bell Atlantic and NYNEX. Chase, which already issues the NYNEX credit card, purchased the Bell Atlantic Visa portfolio from First Omni Bank. Chase will combine the two portfolios and issue a credit card bearing the new Bell Atlantic logo. The Bell Atlantic Visa was introduced in October 1995 and has grown to more than 500,000 customers and $355 million in receivables. R. K. Hammer served as transaction advisor to First Omni.

A new Bell Atlantic credit card will debut next year as a result of the agreement announced today between the telecommunications company and Chase Manhattan Bank USA, N.A., a subsidiary of The Chase Manhattan Corp. (NYSE: CMB), the nation’s largest banking company.

The announcement follows on the heels of last week’s merger between Bell Atlantic and NYNEX that extended Bell Atlantic’s service region from Maine to Virginia.

Chase, which already issues the NYNEX credit card, has purchased the Bell Atlantic(R) Visa(R) portfolio from First Omni Bank, N.A., a subsidiary of First Maryland Bancorp. Chase will combine the two portfolios and issue a credit card bearing the new Bell Atlantic signature early in 1998.

Terms of the agreement were not disclosed.

“We’re extremely pleased with this opportunity to partner with a bank that has strong ties throughout the new Bell Atlantic region,” said Marianne Berry, vice president of Bell Atlantic Credit Card Services.

“Chase brings financial strength and broad industry experience to the Bell Atlantic credit card,” she said. “This is a real win for our cardmembers and one more way we can continue to give top value. I think our product will attract many new customers when we introduce it early next year.”

Berry stressed that both NYNEX and Bell Atlantic cardmembers may continue to use their credit cards and will see no change in billing or services. The Bell Atlantic Visa was named a top rewards card by Money magazine in its August issue.

“This partnership is a natural extension of our other banking relationships with Bell Atlantic and NYNEX, prior to their merger,” said Michael Urkowitz, Chase executive vice president.

“Chase has carefully chosen a few co-brand partners who are leaders and innovators in their respective industries to offer our customers the benefits of the best brands in the telecommunications, retail and oil businesses. We want to do business with companies that are strong national or regional firms, who have significant market share and loyal customers. The Bell Atlantic-Chase co-branded card will be a strong addition to our diverse selection of credit card products,” said Urkowitz.

Urkowitz said the Bell Atlantic partnership also offers the potential for alliances in other areas, including cellular, Internet, video and entertainment services.

Prior to its agreement with Chase Manhattan, Bell Atlantic’s Visa was issued by First Omni Bank. This has been a successful partnership and the decision to sell the portfolio to Chase was a mutual decision, said Berry and Richard H. White, president of First Omni.

“First Omni has a strategic commitment to the mid-Atlantic region and as Bell Atlantic’s merger with NYNEX progressed, it became obvious that it was time to reevaluate our agreement,” White said. “Now that Bell Atlantic has a larger footprint that extends beyond our region, our bank would have fewer opportunities to develop banking relationships with our credit card customers.”

White said First Omni continues to have an excellent relationship with Bell Atlantic and will handle customer service and billing on the Bell Atlantic card until the transfer to Chase is completed in 1998.

“First Omni has played a critical role in developing the rewards program for the Bell Atlantic card and launching the program. Their efforts have been a major factor in the card’s success and have positioned us well for the future,” added Berry.

The Bell Atlantic Visa was introduced in October 1995 and has grown to more than 500,000 customers and $350 million in receivables. It offers cardmembers rewards based on purchases on their credit card, Bell Atlantic home phone services and calling card calls. Every time cardholders earn $20 in rewards, they receive a check that can be applied to their Bell Atlantic phone bill or Bell Atlantic Mobile bill. Since its introduction, customers have earned more than $20 million in rewards.

At a time when other co-branded cards are pulling back and capping their reward programs, the Bell Atlantic card has thrived, according to Berry.

“We think we’ve found the right formula,” she said. “Co-branded cards are like a three-legged stool. They only stand up if everyone gets value — our customers, our partner bank, and Bell Atlantic. We feel our reward program is an excellent deal for everyone and will hold up over the long run.”

Chase Manhattan, which also issues the Wal-Mart and Shell co-branded cards, is committed to maintaining a reward program that offers strong value. “We’re making a long-term commitment to the Bell Atlantic credit card,” Urkowitz said.

The Chase Manhattan Corporation (NYSE: CMB) is the largest banking company in the United States, with over $350 billion in assets. It is also one of the nation’s preeminent financial services companies, with leading positions in credit cards, consumer finance, mortgage banking, electronic commerce and investments.

First Maryland Bancorp is the holding company for First National Bank of Maryland, Dauphin Deposit Bank, the York Bank and First Omni Bank. Headquartered in Baltimore, First Maryland now operates 291 branches and nearly 400 ATMs from southern Pennsylvania through Maryland and the District of Columbia and into northern Virginia. First Maryland currently has assets of approximately $17 billion.

The new Bell Atlantic — formed through the merger of Bell Atlantic (NYSE: BEL) and NYNEX (NYSE: NYN) — is at the forefront of the new communications, information and entertainment industry. With 40 million telephone access lines and 5.5 million wireless customers worldwide, Bell Atlantic companies are premier providers of advanced wireline voice and data services, market leaders in wireless services and the world’s largest publishers of directory information. Bell Atlantic companies are also among the world’s largest investors in high-growth global communications markets, with operations and investments in 21 countries.

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