Consumer Payment Card News

Not Another Card!

Prepare yourself for yet another choice among credit card brands. CitiGroup is bucking VISA to promote the ‘CitiCard’. It appears MasterCard may accomodate CitiGroup’s wish to put the VISA or MasterCard logo on the back of the card instead of the front. CitiGroup’s threatened migration to MasterCard from VISA appears to center more on association fees than the branding issue. As profit margins dwindle amid rising marketing costs and shifting cardholder behavior, CitiGroup, like its competitors, is seeking to lower all costs and spend more efficiently. VISA reportedly said CitiGroup paid $78 million in annual association fees to VISA during 1998. CitiGroup has made it clear it would rather fund the marketing of its own brand than subside, through VISA, marketing for its competitors. Even if CitiGroup gets what it wants from MasterCard, CitiGroup’s strategy is risky. To enter another card brand into the marketplace at this point in time comes with a very high price tag. Brand awareness is not something that is achieved overnight and consumers may ultimately find it confusing. Furthermore CitiGroup has a bad track record with brand building. Its efforts in the mid-80s to launch the Choice card was a disaster and it has only recently made any headway building the Diners Club brand. Discover, a branding success, also found out the hard way that cluttering the market with new brands and sub-brands does not work. Discover is now in the process of re-focusing on its Discover brand, shedding the sub-brand Bravo and pulling back on the Novus brand. American Express has also indicated that its Optima brand has really never connected with American consumers. For more information on the industry marketshare and other statistics please visit CardFlash ( or CardData ( Both services are fee-based.

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