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Kimmykim · 07-21-2003, 01:59 PM

In order to start a credit card that has any viability you would need two things.
1. Distribution. How will you get the cards into the hands of the end users? How many cards can you get into the hands of the end users in how fast a time frame?
2. Acceptance. If merchants can't accept your card then you're dead. Making changing to POS terminal software and so on is a lengthy and expensive process and merchants and hardware leaseback agents are not going to pay for it.

So what do you do?

The critical mass number is somewhere in the 6 million users range and I'm not sure the number of accepting merchants, in order to have a semi-viable solution.

It's a Catch22 basically at this point -- you have no merchants you get no users, you have no users then merchants have no reason to accept...

Discover could do what they did because they gave every Sears card holder the marketing blitz initially to get a Discover and charged them way less for using it than their Sears card... and given that at one point Sears was the largest consumer financial services lender, that carried alot of weight.

However, the inability to move past the closed loop has kept Amex and Discover WAY out of the market share compared to Mastercard and Visa. Same problem CarteBlanche and DinersClub have, and they've been around forever...

If you cannot get the banks on board to run interchange and issuance for you, then there is no product. Not on a level that would even begin to compete with MC or Visa.

07-21-2003, 01:59 PM
Kimmykim bitchslapping zebras!!!!! Industry Role: Join Date: Jun 2001 Location: In a shack by the beach Posts: 16,015	In order to start a credit card that has any viability you would need two things. 1. Distribution. How will you get the cards into the hands of the end users? How many cards can you get into the hands of the end users in how fast a time frame? 2. Acceptance. If merchants can't accept your card then you're dead. Making changing to POS terminal software and so on is a lengthy and expensive process and merchants and hardware leaseback agents are not going to pay for it. So what do you do? The critical mass number is somewhere in the 6 million users range and I'm not sure the number of accepting merchants, in order to have a semi-viable solution. It's a Catch22 basically at this point -- you have no merchants you get no users, you have no users then merchants have no reason to accept... Discover could do what they did because they gave every Sears card holder the marketing blitz initially to get a Discover and charged them way less for using it than their Sears card... and given that at one point Sears was the largest consumer financial services lender, that carried alot of weight. However, the inability to move past the closed loop has kept Amex and Discover WAY out of the market share compared to Mastercard and Visa. Same problem CarteBlanche and DinersClub have, and they've been around forever... If you cannot get the banks on board to run interchange and issuance for you, then there is no product. Not on a level that would even begin to compete with MC or Visa.