ARLINGTON, Va. – VISA, the largest credit card brand in the U.S. has announced changes to its card platforms that could significantly strengthen the relationships between credit unions and their cardholders. The card association has removed almost all of the card enhancements that it used to mandate for each card level, whether Classic, Gold or Platinum, and has instead granted card issuers a great deal of flexibility in designing each of their card programs. This should enable credit unions that take advantage of the changes to offer cards that are much more customized to their members' card needs than they were previously, according to Sarah Thompson, vice president for consumer credit products. "What we really hope will happen is that each credit union will issue a VISA Classic or VISA Gold card that will be significantly different from any other issuer's cards," Thompson said, explaining that VISA was motivated by a desire to help card issuers keep their cards marketable during a time of increased credit commodification among card products. "We want our cards to be very closely associated with the institution that issues them," she added. As part of the changes, VISA has stripped the so-called card enhancements, like travel insurance and so-called concierge services, from their different card platforms. The association has retained emergency card and emergency card disbursement, lost or stolen card reporting and zero liability for purchases made with lost or stolen cards. It has also added auto rental insurance to all of the card programs, where it had previously been reserved to the Gold and Platinum Platforms. Thompson reported that VISA had made this change after determining that auto rental insurance was among the card enhancements that were pretty much universally liked among consumers. In place of the enhancements VISA has removed the card association will make available at least 16 different card enhancements that it will provide to the card issuers at a bundled or reduced rate (see sidebar). Credit unions may choose enhancements from among that list, for a fee that reflects VISA's power to command good prices, Thompson said, or even promote their own enhancements without having to clear them with VISA. If a credit union issuer wants to enhance a card with a benefit from within the credit union or with a relationship the institution has, it is free to do so, Thompson added. In addition to the enhancement changes, VISA also eliminated 104 regulatory changes from between the card platforms and further streamlined many of the program administrative requirements. Key among these changes include eliminating the requirement that the credit union issue new Batch Identification Numbers (BINs) when a credit card holder moves their account from the Classic to Gold to Platinum. This will both help credit unions cut management costs in their programs, as well as allow cardholders to keep their card numbers which are often resident with online merchants and service providers and currently have to be updated to reflect every change. What The Changes Mean? The changes VISA has made are to such a degree and are so far reaching that credit union card executives stressed that it could take up to a year or more for the effects of the new changes to make their way through credit union card programs. But overall credit union card executives said the changes should strongly benefit credit union card issuers. "I think these changes position credit unions for what could be explosive growth in the card programs and portfolios," said Steve Railey, executive director of card portfolio management for PSCU Financial Services. PSCU is the St. Petersburg, Florida, based card transaction processor for credit unions which process with Denver based First Data resources. Long an advocate of credit unions using their card programs to strengthen bonds between the credit union and the member, Railey said the VISA changes would simply enable credit union to do more of what they already do. "Who knows what credit union members want more than their own credit unions," Railey asked, adding that in an era where credit cards are steadily becoming more and more commodities credit unions would be strengthened by anything that allowed them to differentiate their cards. Railey added that credit unions may particularly benefit from being able to offer a more specialized card to compete with the commodity credit card offers that regularly flood their members' mailboxes. But two card executives who did not want to speak for the record, citing their ongoing work with VISA, expressed doubt about the platform changes. The executives pointed out that VISA stands to benefit from making the enhancement changes, which used to be funded by VISA but which credit unions were now going to have to buy from the company. "This is going to make credit card programs more expensive and more complicated," complained one, "and will probably make VISA more money by getting them into lines of business where they were not before." But Sue Chrzan, communications specialist with Card Services For Credit Unions, the association of credit unions that process their card transactions with Atlanta-based Certegy, said that that credit unions would be able to keep their costs in check by picking and choosing their enhancements and by being free to leave some on the table. Both Railey and Chrzan said that their associations were still evaluating the changes and examining how they might better help their member credit unions take advantage of them. Both expected their associations may put together packages of enhancements that credit unions could choose to add to their cards at a better price than they could get otherwise. [email protected]