Long-Time Credit Card Exec Saunders Takes over Embryonic Visa Inc.

Credit card industry veteran Joseph W, Saunders has resigned his position as president of card services at Washington Mutual Inc. to become executive chairman of Visa Inc., the entity Visa announced last fall as the planned publicly held company embodying all of its worldwide operating divisions except that for Europe (Digital Transactions News, October 11, 2006). Separately, Seattle-based Washington Mutual said it has appointed another long-time card executive, Anthony F. Vuoto, to replace Saunders. Both Vuoto and Saunders came to WaMu in 2005 with the banking company's acquisition of Providian Financial, of which Saunders was chief executive. Visa said in a statement Monday that Saunders will be “responsible for leading Visa's transition to a global public company” and will have among his duties the recruitment of a permanent chief executive for the new Visa Inc., which is expected to be formed later this year as the result of the merger of five of Visa's six global operating regions, including Visa USA and Visa Canada, as well as the operating regions of Visa International: Latin America and the Caribbean; Asia-Pacific; and Central and Eastern Europe, Middle East, and Africa. Visa Europe will remain a bank-owned association and will become a licensee of Visa Inc. After the merger, Visa Inc. is expected to launch an initial public offering as the culmination of a process the company said in October could take from 12 to 18 months. The move toward public ownership is widely seen as in part a response to litigation risk the banks that have owned Visa throughout its 36-year history would otherwise have to assume as a result of antitrust cases being brought by merchants over interchange fees. Access to public markets is also seen as essential to development of promising new payment technologies, including mobile and contactless payments. Driven by the same considerations, rival MasterCard Inc. went public in 2006. Visa says Saunders will function at first as a “designated appointee” of Visa Inc., assuming the executive chairman title later upon the official formation of the company, and is expected to serve as lead director of Visa Inc.'s board of directors through the IPO. He will report to Visa Inc.'s transition governance committee and is giving up his position on other Visa boards. Saunders brings long and wide credit card executive experience to Visa, something the San Francisco-based card network is clearly counting on as it restructures itself. “His strong reputation and contacts within the business community will enhance our ability to attract top-tier talent to lead Visa Inc.,” said William I. Campbell, chairman of the board at Visa International, in a statement. “His experience and insight will be particularly valuable to such important tasks as developing Visa Inc.'s board of directors, organizational structure, and corporate policies.” Before joining Providian in 2001, Saunders was chairman and chief executive of Fleet Credit Card Services for FleetBoston Financial Corp., now part of Bank of America Corp. For 12 years before that, he was at Household International, where he eventually became chief executive of card services.