Visa launches international e-commerce initiative

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Visa International, the world's largest credit card organization, is launching a global project to set up business-to-business electronic-commerce programs throughout Latin America, Europe, the Asia-Pacific region, the Middle East and Africa.

Visa will develop country-specific b-to-b electronic-procurement sites, regional portals, and pacts with local banks and technology vendors.

This is the most encompassing b-to-b e-commerce program of this type launched by a financial services organization. Visa plans to target large corporations and will offer secure Internet environments in which to conduct transactions.

Visa's global moves come as its U.S. subsidiary, Visa USA, is in the midst of launching eVisa, an Internet unit dedicated in part to developing technology platforms to help domestic banks build Internet procurement systems in the b-to-b space.

Spending tens of millions

Visa International executives would say only that the organization is spending "in the millions" on the global project. However, b-to-b industry analysts estimate Visa will spend more than $20 million on the effort.

"This is potentially huge," Varda Lief, a senior analyst at Cambridge, Mass.-based Forrester Research, said of the Visa venture. Ms. Lief, who covers the b-to-b e-commerce industry, said Visa's worldwide payment-processing platform puts it in a unique position to carry out its plans.

Visa's global rollout comes at a time when b-to-b companies outside the U.S. are beginning to recognize the Internet's potential. A recent study conducted by The WEFA Group, Eddystone, Pa., estimated that the European b-to-b e-commerce marketplace will explode to $176 billion by 2002, from $7 billion in 1998.

Visa is launching its project with assistance from its 21,000 member banks, which jointly own the Foster City, Calif.-based credit card organization. Technology vendors and the banks are assisting companies in setting up the sites and portals, which in most cases will be hosted by b-to-b corporate customers. Some of the sites and portals will be hosted by partner banks or Visa itself.

Asia rising

Visa International recently kicked off its initiative in Asia with the establishment of b-to-b e-procurement sites in South Korea and Singapore.

Visa's Asia-Pacific office, in Singapore, teamed with such companies as Microsoft Corp., Redmond, Wash.; KPMG L.L.P, New York; and Dacom Corp. and Koram Bank, both headquartered in Seoul, Korea, to launch BizClick ( The site, targeted at large corporations, allows for e-procurement using partner banks' financial systems and Visa's payment networks.

In addition to e-procurement functions, BizClick contains information such as breaking business news and business insurance advice. Another Visa site, Commerce Exchange, based in Singapore, is narrower in focus than BizClick, and covers only b-to-b vertical communities, said Raymond Hsiung, director-commercial e-commerce for the Asia-Pacific.

Visa will follow its South Korea and Singapore launches with b-to-b sites in Australia, Taiwan and Malaysia within the next six months, Mr. Hsiung said. Soon after the country-specific site launches, Visa will set up a Pan-Asia b-to-b portal that will serve as an umbrella Web venue.

Visa's b-to-b e-commerce plans for Latin America are similar to those for Asia and will include country-specific sites and a Pan-Latin American portal, said Federico Bucspun, Visa's Miami-based manager of commercial products-Latin America and the Caribbean, Brazil and Mexico b-to-b e-procurement sites will be launched possibly within the next six months, followed by country sites throughout the rest of the region, Mr. Bucspun said. Brazil and Mexico are being targeted first in part because of the countries' advanced telecommunications infrastructures, he said.

Pre-emptive strike in Europe

Visa is taking a separate b-to-b e-commerce approach in much of Europe, opting not to establish sites and portals, said Mark Leitch, consultant-Visa commercial products, Visa European Union.

Instead, Visa's European Union office has begun entering pacts with technology vendors and member banks so it will be poised to offer e-commerce assistance when companies request it, Mr. Leitch said. Visa European Union's b-to-b footprint consists of 26 countries, including the members of the European Union, plus Turkey and Israel.

Visa and its partner technology vendors will help banks so they can assist their customers in setting up b-to-b sites, which in most cases will be hosted by the customers themselves, Mr. Leitch said. Recently signed vendor partners include General Electric Co., New York, and Elcom International, Norwood, Mass. Once the sites are up, Visa will concentrate on automating data and payments over the Net.

Visa's Central and Eastern Europe, Middle East and Africa unit, which is headquartered in London, will be following the Asia-Pacific and Latin American models, launching country-specific sites and Pan-regional portals with partner banks and vendors, said James Wood, head of external communications.

Tough competition

Visa's global b-to-b e-commerce plans face formidable challenges. The company is entering a b-to-b arena that is being targeted by other financial services heavyweights.

For example, New York-based Citigroup recently started hosting company-specific b-to-b sites. Executives at Citigroup, which is one of the member banks that own Visa, declined to comment on the credit card giant's e-commerce plans.

On the marketing front, Visa will in all cases market its b-to-b e-commerce initiatives through its partner banks. Visa will help banks "grab the land" in the b-to-b space by assisting them in developing marketing plans and by introducing potential customers to them, Mr. Leitch said. The banks will tout their Visa relationships to leverage the credit card organization's global brand franchise, he said.

In Asia, Dacom, South Korea's second-largest telecommunications company, will market the b-to-b e-commerce packages to its more than 20,000 business customers, Mr. Hsiung said.

Visa's high global brand recognition among businesses makes it a tough company to beat in the b-to-b e-commerce space.

"Visa is a big global brand, and this is even more important in Latin America and Asia than in the States," said David Sanderson, a partner in Boston-based Bain & Co.'s e-commerce consulting unit. "The solvency of a business is a big issue in these places. Visa stands for financial stability. That is pretty compelling."

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