BankAmericard, every mention

Visa (Audio) · Acquired Nov 27, 2023 · 42 mentions

• ▶ 10:49 David Rosenthal So, this is what they are launching, first in Fresno as the pilot market, and they call it the Bank AmeriCard.
• ▶ 28:22 Ben Gilbert Often, in the past, before the Bank AmeriCard, what would happen is you'd have this charge card, not a credit card, and the bill would arrive at the end of the month, and then you would pay it.
• ▶ 28:31 Ben Gilbert The innovation baked into the Bank AmeriCard is they say, well, after the 30 days, you can get your statement, you can pay it in full, or
• ▶ 29:35 Ben Gilbert The big takeaway for Bank AmeriCard is it really bundled two different things together.
• ▶ 38:38 David Rosenthal With the express purpose of licensing out the Bank AmeriCard program and network to banks across the country, across all 50 states.
• ▶ 41:15 Ben Gilbert You have been telling me about the Bank AmeriCard from Bank of America, and I opened this show saying Visa's not a bank, and Visa doesn't have direct relationships.
• ▶ 41:39 David Rosenthal In this second chapter, there is also only one person in the world that could have taken Bank AmeriCard and turned it into Visa, and that is D-Hawk.
• ▶ 41:52 David Rosenthal B of A now starts going around to all the other consumer banks in other states and selling them on joining the network as Bank of AmeriCard licensees.
• ▶ 42:02 David Rosenthal And the deal is that you pay B of A a 25,000 dollar franchise fee to get your franchise of the Bank of AmeriCard.
• ▶ 44:31 David Rosenthal Had signed up to be a franchisee of Bank of AmeriCard back in the day.
• ▶ 45:14 David Rosenthal Bank of America owned and operated Bank AmeriCard system.
• ▶ 46:50 Ben Gilbert The original Bank AmeriCard was very similar to American Express and Diners Club where they were closed loop systems.
• ▶ 47:04 Ben Gilbert This new Bank of AmeriCard licensee system that they're starting to sort of develop here that would become Visa, it's an open loop system.
• ▶ 47:24 David Rosenthal So this interchange thing, all of the other banks that are now signing up to become, you know, B of A franchisees for the Bank of AmeriCard system,
• ▶ 48:46 David Rosenthal The Bank of AmeriCard three-colored bands, the blue, white, and gold, are also worth an incredible amount here.
• ▶ 49:04 David Rosenthal So, as all these other banks are considering whether to become franchisees of Bank of Merit Card, and some of them are like, no, I'm not gonna do that.
• ▶ 51:33 David Rosenthal It all is the Bank of AmeriCard name, brand, and importantly, mark.
• ▶ 52:36 David Rosenthal Bank AmeriCard.
• ▶ 52:38 Ben Gilbert And this would go on to be incredibly valuable to plaster on your storefront and say, we accept Bank AmeriCard here, and that just means your sales are gonna go up.
• ▶ 54:54 Ben Gilbert After a whole day of sales, you've got a bunch of sales drafts where you say, all these customers came in with Bank AmeriCard, they said they're good for the money, so I gave them the goods, and now I'm holding the sales drafts.
• ▶ 56:05 David Rosenthal Banking, charge card, credit card system is operating at scale in the country, and even though Bank of Merit Card had been operating for a couple years internally to B of A in California, now it's going across state lines.
• ▶ 58:55 David Rosenthal One of the people that gets put on that committee is the Bank of AmeriCard franchisee program manager from a small bank in Seattle
• ▶ 59:27 David Rosenthal But for the moment, the person running their Bank of America card franchisee program is one D.
• ▶ 1:04:42 David Rosenthal You've got a bunch of banks in Illinois that are now all part of the bank AmeriCard payment network, which is intimately linked with their banking operations.
• ▶ 1:09:41 David Rosenthal He is running the Bank of Merit Card franchise program at what would become Rainier Bank in Seattle.
• ▶ 1:10:14 David Rosenthal Now walking into the boardroom in Bank of America, which is what he's gonna do, and standing toe to toe with the vice chairman of Bank of America and saying, I think you should give me the Bank of America card program because it is in your…
• ▶ 1:13:27 Ben Gilbert Like, would you rather own a few percent of something that is the default global way that commerce is produced, or would you rather own a hundred percent of, you know, Bank of America cards?
• ▶ 1:14:20 David Rosenthal He needs to be able to go to, say, the couple banks in Illinois that are existing franchisees of the Bank of Merit Card system and say, hey, the new regulations, the new operating laws for this organization are going to be all the banks in…
• ▶ 1:16:14 David Rosenthal One, ownership of this new organization that's gonna be called National Bank of AmeriCard, Inc., the new owner of the Bank of AmeriCard program, is going to be in the form of irrevocable, non-transferable rights of participation.
• ▶ 1:20:46 David Rosenthal .3, we've basically already discussed, and that is that the mission of this organization is to facilitate cooperation and trust among competing institutions to grow the Bank of AmeriCard payment network larger than any one institution…
• ▶ 1:23:35 David Rosenthal Member bank of the previous Bank of AmeriCard franchisee organization.
• ▶ 1:26:01 David Rosenthal He goes and creates a parallel, similar organization of international banks using the Bank of AmeriCard system.
• ▶ 1:31:27 David Rosenthal Yeah, Bank of Merit Card ain't gonna work.
• ▶ 1:35:34 David Rosenthal The name change ends up becoming this incredible growth hack because what happens is they're the new operating regulations now that mandate that all cards out there, all the previous Bank of America cards need to be migrated to Visa cards.
• ▶ 1:36:01 David Rosenthal So the competition within the network, obviously, this still exists, because consumers now, they know, and Visa runs a national advertising campaign, hey, your Bank of AmeriCard is going to switch to Visa.
• ▶ 1:36:13 David Rosenthal So some banks, in a version of the Fresno drop, they start sending unsolicited letters to consumers who are already Visa, Bank of AmeriCard customers with another bank.
• ▶ 1:37:46 Ben Gilbert Thirty seven million versus Bank AmeriCard's thirty one million before they changed to Visa.
• ▶ 1:53:08 David Rosenthal So say, you know, now that Bank of BearCard is nationwide,
• ▶ 1:56:34 David Rosenthal Go build a computerized authorization system for the Bank of AmeriCard Visa network.
• ▶ 2:46:14 David Rosenthal One fun way to think about that that I calculated is if you start from 1971, the first full year that the Bank of AmeriCard network was liberated from Bank of America,
• ▶ 3:38:11 Ben Gilbert And the beautiful irony that will tie a bow on this whole episode is the Bank AmeriCard credit card by Bank of America runs on MasterCard's network.
• ▶ 3:38:31 Ben Gilbert Get yourself a Bank AmeriCard.