I've been trying really hard to understand why Visa would make such an obviously unfriendly and counter-productive decision. The only theory I can come up with is that their real customers are the banks, and this is their way of saying to them "We're so completely ruthless that you're better off doing deals with us than anyone else". Seems a bit far-fetched though.
Visa's market research suggests a significant increase in Visa usage and Visa brand value among consumers aware of their Olympic sponsorship (which has been ongoing since 1986, and already committed through the next 4 Olympics games):
> According to the U.S. Sponsorship Tracker, a Visa commissioned study following the Vancouver 2010 Olympic Winter Games conducted by Performance Research, an independent research company, Visa cardholders
who were aware of Visa’s Olympic Games sponsorship claimed a 16 percent and nine percent increase in Visa card usage in Canada and the US respectively. The same report found Visa’s brand equity was 32 percent and 38 percent higher among consumers who were aware of Visa’s sponsorship in Canada
and the US respectively.
> I've been trying really hard to understand why Visa would make such an obviously unfriendly and counter-productive decision
The first Olympics game where Visa was exclusively accepted was Calgary 1988. This isn't a decision they just made.
When a company is paying for research about its own decisions, the research always comes back that the decision was wonderful, or that research firm doesn't get hired again.
This is the key part. Research funded by biased parties can produce valid research and results. There is the case of the physicist that was skeptical of global warming that was funded by the Koch brothers to study global warming. As a scientist, at a well known college for physics, he was skeptical but not blinded by money/politics. His research changed is mind completely.
But, like you said, he won't be hired again by two brothers that are wealthily through oil.
This kind of thing is par of the course for company politics. But probably unlikely to persist this long.
That said, it's not surprising that the overall effect of the sponsorship was positive since refusing MasterCard and debit was only one small aspect of Visa's campaign. Reading about this again in London made me all riled up again, but Morgan Freeman's soothing voice will likely undo the damage soon enough.
This is a direct pay solution used with online terminals, the Visa/MasterCard-part of your debit card is just for offline transactions or credit.
It would be the height of stupidity for Mastercard and Visa to allow banks to issue cards with their labels and then have these cards be part of some secret "strictly Northern Europe" Mastercard/Visa network. Talk about confusing the customers.
But this is all moot: I have both Mastercard and Visa debit cards issued in Sweden. They work perfectly well outside of Europe...
I'm sure people appreciate VISA's Olympic sponsorship, there is little question about this.
Exclusive sponsorship if different from limiting the choices of vendors and customers.
People do not like being limited in their choices, I do not think that benefited them.
Couldn't this be that heavy-Visa users notice the company's sponsorship and usage more generally? This doesn't really prove that Olympics sponsorship increases usage.
> The same report found Visa’s brand equity was higher among consumers who were aware of Visa’s sponsorship.
Again, couldn't it just be that the kinds of people who notice that Visa sponsors things are the kinds of people who already like Visa? This doesn't establish that sponsoring the Olympics helps Visa.
Could be, but it's highly unlikely that a company who does surveys as its core business doesn't know this and tries to control for it, or at least explain it in they methodology section of the report they deliver.
Where is the evidence that actually preventing people from using mastercard helps?
This is more like BMW deciding to sponsor the construction of a road and only allowing their cars to pass.
Denmark had something similar with Visa as well. Apparently it works since I am now very likely to get a Visa-card next to my Mastercard for those just-in-case situations.
I'm sure your card failed to work but I doubt it had anything to do with a big Visa logo on the machine.
So, I'd say it indeed may be a good idea to have a Visa card - along with their competitor's cards.
I had two Visa cards that I couldn't use, so frustrating.
It's like "for your convenience."
"For your convenience, all toilets have been closed."
Unlike Visa in the US, Visa Europe is still owned by its 3000+ member banks. It's only responsibility is to make its shareholders happy.
Americans have a lot more personal debt than Europeans. 'In Free Market America, banks own YOU!' would be more appropriate.
But wrong. Or at least 'they own the unwary and dumb'.
I bank with a credit union, got rid of my credit cards in favor of debit, and working real hard to pay down my debt. Already I've bought two vehicles for cash.
Now, granted, they were not _great_ vehicles, but they run and they're paid for. Looking forward to paying _cash_ for a really _nice_ (but used) car in a decade.
Why did I?
Because it was too easy to use credit, not pay the balance in full. The debt built up. Things got out of hand.
And because I really did not like dealing with the credit card folk, even when I was in their good graces. Too much complexity.
The context I've heard of people getting in trouble with this is when they used the card for business purchases and then used the discounts for personal purchases.
You aren't doing as badly as you think.
 I assumed you were based in america, but apparently you are in sydney, sorry for confusion and random assumptioness. However, this means that according to the first chart on the page I linked, you guys are doing worse than the americans on household debt. Not that I can point fingers from the uk, cos we are either screwed or up to something fiendishly smart. But if it is the latter, I have no idea what it is.
It would be interesting to see how that compares to Greece, Spain, Italy, and other more troubled EU countries. The EU situation suddenly seems a lot scarier to me financially.
I should add that Steve Keen's writings on debt are absolutely must-reads for anyone interested in macroeconomic outlooks especially because he discards Neoclassical models in favor of debt-based models.
Two of my favorite quotes by Keen from his presentations are:
"The one thing Neoclassical economists don't understand is Neoclassical economics."
"The Marxist economists hate me even more than the Neoclassicals, which is quite an achievement."
Ah.. Just looked it up. - http://www.apnewsarchive.com/1996/Visa-Will-be-Only-Credit-C...
OK. Fair enough. They haven't just miraculously turned into complete bastards on this, they were just complete bastards all along and the press happens to be making a fuss about it at the moment, just cos it is news with the word 'olympics' in it.
For example, in the past when I found a flashy new b2b service I would grumble when I couldn't find a price list and continue my research. Now, when I visit a company's page and there are no listed prices, I immediately close the tab and forget about it.
Saying "We only accept Visa" is like saying "We only serve white people." Exclusive, yes. A reminder of ethnic and class privilege, yes. Desirable by any progressively minded individuals? Absolutely not.
A note about online payments when it comes to credit cards, I pretty much stopped using my Mastercards with the exception of Amazon because of that damn Securecode implementation. I think payment processors and providers who erect any restrictions or barriers will find them self quickly suffocated out by services who are going the other direction. (I'm one of the guys who believes within the next 5 years you'll just be able to walk out of most stores with a product and seamlessly be billed for it, uber style.)
Cash or Visa Only.
So there I was at an official Olympic souvenir shop picking up some gifts when I was told no - I'd have to walk down to the other end of the airport terminal and take out cash... come back and pay with that.
Needless to say they lost the sale. How many other sales did they lose I wonder?
Surely not enough to cover the massive amount of money Visa paid to be an exclusive sponsor. In London this year that is reportedly over $100M and during the first week Visa racked up $700 million worth of charges at the games.
This could be the most profitable marketing spend with the quickest ROI ever.
Visa doesn't get that - the issuing bank does. Visa probably gets %0.1 of the charge.
Moreover, the terms the independent vendors get are likely extremely onerous, such that they are likely the ones shafted with inventory for items that don't sell.
The IOC gets the money coming and going. Which is good to support, you know, amateur athletics.
> in Canada we don't have Visa Debit cards
In the US it's common for merchants to always take both, it's not so elsewhere. I did take a taxi once in the US that only took one and not the other - and not the one I had.
That ended up as a half hour drive around town looking for an outdoor ATM.
The only major one that doesn't is Capital One... and they mostly issue mastercards.
(I don't work for Visa, but they sent my girlfriend one in the mail.)
Here's a relevant article which discusses attempts to limit the surcharges: http://au.ibtimes.com/articles/351577/20120613/rba-seeks-lim...
I'm a Visa user, plus I don't plan on going anywhere near the Olympics despite living fairly close to London, but when I heard about this marketing plan I literally thought it had to be one of those hilarious fake news stories. But it wasn't.
Stuff like the McDonalds sponsorship he mentioned (banning people from selling chips) is bad, but at least as a consumer if you want chips... you can still buy them.
But this Visa deal, what on earth are people without Visa supposed to do? I just don't see how anyone sane could think this was a good plan, either from an Olympic organiser's point of view, or Visa's.
Oh, and the OP talks as if there's a difference between how international and UK people are affected by this, but that really isn't the case. Based on my own anecdotal evidence I certainly know many more people who have at least one Visa card than people who have at least one non-Visa card (myself for example, my personal debit card, personal credit card, and company credit card, despite being from three different providers, are all Visa), but there are still plenty of people using, for example, cards from MasterCard.
It's been working for the past 26 years that Visa has sponsored every Olympics game. This isn't a new thing. This is what pays for the Olympics even occurring. Their sponsors are exclusive sponsors. Visa's already committed to the next 4 games as well (through 2020).
As far as Visa's point of view:
Even conservative estimates of the final cost of the Olympics are around 10bn. Visa paid only 100m so I think the games would have been fine without them.
I think both OP and you (or me, for that matter) don't have access to important data - specifically, what's the percentage of people that have BOTH Visa and MasterCard (and what percentage of those that do not, are likely to buy ticket for games).
If it's low - then it probably was a stupid move, although I don't really feel qualified to say that.
If, on the other hand, it's very high (like 90% (which I think it is)), then it's very smart move.
The problem with a payment provider striking an exclusive deal like this is that it creates very real problems for people unlike, say, and exclusive beer deal. And it creates a great deal of negative feelings towards both Visa and the Olympics. I'm sure Visa is able to show that it is a good deal for them. But I suspect it is just as easy to show the opposite. Not smart at all.
So, by taking a decision like that, you're alienating quite a few people, based on non-relevant criteria (not wealth related ones).
Humans make purchasing decisions in a fundamentally emotional way. Most of the best marketing out there trades on emotion.
People get pissed off and hold grudges in a completely irrational way. Think of all of the people who refuse to buy [BRAND X] because the first product they had from them eventually failed. Visa just went out of their way to have a lot of people hold grudges against them.
I do not have a Visa card. I have one Mastercard and one Discover card, plus my PayPal credit/debit card which is also Mastercard. The only Visa I've had in years have been those prepaid rebate cards.
But I don't think it's VISA that we should be blaming but the Olympic Committee that agreed to this and the McDonald's deals. They didn't have to accept those conditions.
High cash back is a fair enough reason, thanks.
My friend dealt with sponsorships in the venues for the Vancouver 2010 Olympics.
One of her tasks was getting the venue menus signed off on by the sponsors.
One of the food vendors wanted to serve potato wedges at the venue.
But because McDonald's was one of the 2010 title sponsors, and they had the same "no french fries" clause, my friend spent ~6 months of her life negotiating with the McD's folks over the difference between potato wedges and french fries.
In the end, the vendor got to serve potato wedges, but McD's got a ton of concessions in exchange (better signage location, etc etc).
The marketing agreement with the IOS is:
- You get your brand prominently featured across venues, media feeds, and collateral.
- All competitors are iced out.
I'm OK with the first.
I'm not OK with the latter.
Particularly in light of the Orwellian trademark and copyright enforcement (including significant changes to corresponding statutes) the IOC is granted.
That and the fact that Olympic athletes are no longer amateurs, but professionals. It's a charade. An impressive one at times, but a charade all the same.
So if a company signs an athlete to wear their tennis shoes (for example) any image from any olympics, the IOC gets a fee. Not the athlete (of course the athlete is begin paid anyway).
Same thing, different brand
Just to clarify, the restriction only applies in and around the Olympic venues, not the whole of London!
If you do not have a Visa card, your bank will be able to help you select and apply for the Visa product that best suits your needs. For more information on how to obtain a Visa product, please visit the Visa website.
Do they seriously think I'm going to organise a new card just to buy Olympic products? A better piece of advice might be:
If you do not have a Visa card, find a friend who does and get them to buy the tickets for you. Then settle with cash and buy them a beer for their trouble.
If you do not have a Visa card take your money elsewhere, we don't serve your kind here.
"Am at the GB v UAE match, and there's a serious problem with Visa. All the cash machines are turned off as they accept non-Visa cards, and the Visa-only card payment system has crashed. There's a lot of frustrated people here with no money and no food for two football matches. No one wants to do anything here. Very annoying, lots hungry and thirsty people here."
Also, pre-Olympics they had the games zones remove all non-Visa machines.
"Visa confirmed that it was replacing the existing cash machines at various Olympic sites with machines running on its own system as part of its exclusivity arrangement as a sponsor. The move means people with Mastercard credit or debit cards will not be able to use the ATMs to withdraw money."
Gold in the Corporate foot shooting event goes to.....VISA!
In reality they likely feel indifferently(they're going to make a lot of money anyways, just being at the Olympics). But they certainly do not think to themselves "This is a good thing I'm doing. I'm happy to present this to my customers."
I once did some contract work at Visa. At the time, I only had Mastercard and American Express. Went to their work cafe, tried to get some food, but was told (almost rudely) that they only took Visa. No cash either. I could buy a pre-paid card that can't be reloaded at one of the nearby kiosks (for 3 dollar fee per card). Needless to say, I went somewhere else for lunch.
In any other situation this would not be allowed to happen, and that it actually has happened (amongst all the other things, like the excessive promotion and monopolisation of unhealthy food and drink) makes me resent both the Olympics and the government that gave them so much of a free pass.
The sheer amount of corporatism and hypocrisy depresses me.
I agree that this seems, in addition to being extremely frustrating to almost all consumers, a silly marketing move, but I'm sure that Visa has run the numbers and has a sound business reason for doing this. Since, judging by mthoms's post, this seems to be a tradition at Olympics, my reasoning may be off, but I imagine that forcing all vendors to only accept Visa must cost a lot more than a sponsorship without that condition—and I really think that they wouldn't blindly jump into that without a sound reason.
There's the obvious trade-off of how much extra money Visa makes from users who have multiple cards and are forced into using Visa where they wouldn't have otherwise vs. money lost from Visa-owners who who are pissed off. But there are probably much more subtle, long-term effects. Maybe 75% of consumers present have a Visa, and 50% of those Visa-owners feel entitled and empowered by having the ability to use their card while others are frustrated; and then there's the trade-off of the 'entitled' Visa-owning 37.5% of consumers spending more with their Visa cards over the following months/years vs. the money lost due to the 25% of consumers who didn't have a Visa at the olympics and possibly hold a grudge and never own a Visa card because of the experience. Not to mention the fact that a similar sponsorship would likely be arranged if Visa decided not to do it; for all we know, MasterCard had a clear business incentive to do this but refrained because of moral reasons, but are we (consumers as a whole) discussing how valiant MasterCard is and how much they respect us as consumers or have we all forgotten a little bit about MasterCard because everyone's talking about Visa?
Again, I don't agree with this idea; I think it's bad and annoying. But I think it's silly and a bit ignorant for all of us (many of whom have no marketing experience, and most of whom don't on this scale) to assume we know more than the marketers making these decisions because we're annoyed.
As someone who worked for an advertising Agency with a big bank as a client, I think this is probably not the case. A marketing ploy usually starts with a reasonable idea and then slowly morphs into something horrible as it makes it's way through various departments; market research, legal, management etc.
This campaign probably started as something entirely different, was rejected by legal and then manipulated at the last minute by someone client side who realised they could force consumers to use their cards.
Some companies have tight, well researched, single minded marketing(eg. Nike). I don't think many banks do, and from what I've seen of Visa's marketing I doubt they do either.
And sometimes there is simply no data. We can't estimate the value of a year of college to the average American. There are a vast number of variables involved in the flavor of Olympic sponsorship. There are a tiny number of observations. Sure, you could count other large events, but few if any are truly on the scale of the Olympics. And there will be differences according to the host city and the technology situation. The harder the problem is, the more your assumptions (or 'a priori knowledge' if you're confident) affect the answers. It's like Congress trying to estimate the effect of legislation on tax returns over the next 30 years.
Still pretty awful for your potential customers.
This would be a bit of scumbaggery but pure marketing genius I say.
There's also something to be said for this being a memorable experience for most consumers at the Olympics. I'm sure Visa damned well knows that a number of people will always remember using their Visa card at the Olympics.
As for that article, I don't need to worry about some "insurance company" caring about my diet since I'm not American. I'm quite sure european privacy laws also forbid sharing of my purchase history outside of the bank.
Why not remove an errand and a hassle from your life?
"If you want people to like you, give them something. If you want people to hate you, take something away from them. "
Hate on Visa (because they don't have to do this), but hate on the IOC as well, and on any city government that OKs this sort of shit.
I do not understand the reasoning behind this by the Olympic committee, because in all likelihood the big corporate sponsors are using the event to entertain clients, and they will likely pay with company Amex cards. Imagine being a businessperson whose company shelled out a sponsorship cost greater than the GDP of some of the competing countries, only to be embarrassed while buying drinks or food for a client because you have to pay for the items on a personal card. Even more embarrassing would be if their personal card was a Mastercard. Angering these types of visitors is not what behooves the olympic committee.
I ask because in the US I would expect Sherman Act lawsuits to be flying over stunts like this.
"Both" is a perfectly valid option. My ire is not zero-sum.. far from it.
It's the olympic commity that agreed on such terms, they are to blame. It does not exempt Visa and McDonalds from being assholes, but if you allow assholes inside your house, now its your problem.
On the other hand, he actually uses the phrase "simple folks" as if this were a Populist meeting in the 1890s.
I'm really surprised by how much that one slip has undermined his credibility with me.
I guess perhaps if the only differentiating factor is "you can use this one if you goto the olympics" then maybe that is enough to sway a bunch of people?
It's also a huge transaction processing system, but the larger part of the organization is in fact responsible for managing the brand.
Think about that next time you're looking at your interest rate and/or merchant fees associated with your credit/debit card.
Considering how much money they have spent to be a sponsor I don't think they count their return to happen during the Olympic period, this looks more to be a habit forming thing (when you go out their aim is you'll go for your Visa by default).
Really, with Visa budgets one expects they could hire somebody to express the same sentiment in a comprehensible manner that doesn't make everybody seeing it go "WTF?!"
The image that Visa is trying to promote is that they're the most commonly accepted card. Because consumer perks vary only slightly (if at all) in home countries, for most consumers, the question becomes permeation. If they see lots of places accepting Visa and not Mastercard then they're more likely to get a Mastercard.
To give you a closer-to-home example: In Canada, we have Tim Hortons - which is a cheaper version of Starbucks (and it's very popular). They take Mastercard, but not Visa. There have been several situations where I've been unable to purchase food because I use Visa and I hate cash. At no point have I said "damn you, Mastercard! I hate you!" In fact, if I actually drank coffee, I'd probably have gotten a MC already.
This is particularly jarring , because in the UK we are just used to the fact that everywhere that accepts VISA will also accept Mastercard. I can't think of a single situation I have been in where that hasn't been the case.
AMEX is a little different , since most banks that offer AMEX will also give you a Mastercard/VISA on the basis that it's less ubiquitous but offers better perks.
WOW! It is totally not offensive, positive and good for MC public image. They must be some marketing wizards or something!
Either that, or Visa people are morons.
* Edit: misprint
You can always walk out of Tim Hortons and get cash out of an ATM, or go to another coffee shop. When your options are either "have no money" or "waste ticket by exiting venue to get cash I can not use at that venue because I can't come back in", it's a bit different.
Actually, no there weren't! Visa insisted that any ATMs that accepted other cards were removed from the venues. This lead to a marvellous screw-up when all of the Visa card machines at one venue went down and there were only 8 freshly installed Visa ATMs to handle the crowds (which replaced 27 that had been removed): http://news.sky.com/story/966545/olympics-anger-as-visa-card...
My local No Frills supermarket is debit or Mastercard only - no Visa credit.
Makes me think that Mastercard Canada must give good rates for low-value high-volume transactions.
Same thing happened to me when I tried to buy Tickets for the NFL. They also only accepted Visa at that time (not sure if it changed since then). I wasn't able to buy Tickets online because of that reason so I looked up the next brick & mortar store which sold these tickets and found that Macy's sells them (at a special counter).
So I drove to Macy's thinking that at least they should accept any credit card - but nope, they rejected my Mastercard so I first had to get cash at an ATM.
I think Visa's point is that you feel limited by not having a Visa card and so are more willing to get a Visa. In my opinion that's kind of similar to how advertisement works in general. You don't see a commercial and immediately go to buy it, but they try to build the sense in you that you actually need the product.
All of these wouldn't have prevented competing currency, but likely meant almost everyone used a visa anyway, assuming they had one. But hey, what do I know? I'm just someone who has a visa card and would have been pissed off and offended at this campaign had I been at the olympics, just like the OP was. I guess we're not the target market, although I can't really determine who is the target market.
Paying with credit card is in itself rare in most of the world outside the US, where debit cards and cash are way more common. My guess is, 95% of all locals and non-US visitors automatically pay with cash and don't even notice the Visa-only signs.
Not having the local currency on you and waving your credit card in situations where it's considered inconvenient and inappropriate is a very typically American tourist thing to do.
And I really can't think of anything within the Olympic venue that would be considered appropriate to pay for with credit card.
I really can't think of anything within the Olympic venue that would be considered appropriate to pay for with credit card.
What are your criteria for 'appropriate' when it comes to paying with credit card? On my way to work today I dropped by a news agent and bought an apple and something to drink, paid with my credit card, and no one thought that was the slightest bit strange.
I live in the UK: You're incorrect. I would say credit card payments make up the majority of transactions (exceptions: buses, market stalls, and Greggs).
The restriction was on both credit and debit cards (people refer to both as "credit cards" in many European countries).
>95% of all locals and non-US visitors automatically pay with cash
Hardly. Most tollbooth lanes in Europe only take plastic, self-service checkout lanes at supermarkets only take plastic. It is completely normal to pay for anything worth more than a few euros with a card.
Exactly. And most debit cards are Visa.
There used to be a time where marketing was about awareness. The extra money that both McDonald and VISA will make from these exclusive deals is likely peanuts to their global revenue, but both squandered their chance of just being visible and now mixed it with "we just spent a lot of money to keep the competition away". Stupid it you ask me.
I don't have a Visa card since a year ago when the ticketing system was announced as Visa only, I didn't attent the games or any aspect of it and it put me of the whole Olympic event that when the torch, cycle races which were going past my house I was like meh and avoided them as Visa had put me off. I don't like credit cards as it is, but bias and descrimination is something I dislike even more and in that I did what I could.
Anyway, it seems reasonable to me that people might want to avoid that when they have a perfectly good Mastercard which has always worked in the past.
I was responding to the "going bad" claim.
But yes, it's not a common situation.
Money of course. What did you think?
The not-selling-fries bit sounds hugely anti-competitive and way beyond the scope of what should be possible by this event. Payment cards go a step further. People rely on their particular card and the norm is to accept at least two kinds of cards. Creating a temporary monopoly on payment cards is again way beyond the reach of what is reasonable for a marketing agreement.
Mine is 'visa-compatible' (and others), draws from my checking account.
Yes, Visa offer debit clearing as well as credit-card clearing. As do Mastercard (Maestro). How switching to a debit card would help, I'm not sure, unless it was a Visa debit ... and in which case, how's that different?
Were I foolish enough to pay money to spectate, I wouldn't even notice the VISA/Master Card thing.
I know at least a couple of European countries where debit/credit cards are prevalent.
In Finland it seems that absolutely everywhere accepts card and cash is very rare. I'd guess at least 95% of the in-person transactions that I see are made with card. Even for the smallest amounts.
For instance, I can buy milk at £0.49 on an American Express card in Tesco, but in my local pub, anything under £10 (on any card other than AmEx - AmEx is still not accepted in that many places in the UK) requires me to pay a £1 transaction fee.
There is no reason behind this, other than Tesco are so huge, they can negotiate a much better rate than a small business, who clearly can't even consider the huge American Express merchant fees.
The sooner somebody disrupts this 'business', the better for everyone.
IE, your choice of supermarket is more elastic than your choice of pub.
Bitcoin seems to be the closest thing we have to disrupting this, but the chicken and egg problem isn't going anywhere.
Actually, I believe handling cash costs them money too and card processing fees might be less than what cash costs them.
It's interesting to compare with the situation in China, where credit cards are very rarely used, but I've never had a problem paying with one in any kind of decently-sized store or restaurant. You almost get the impression that they knew you were coming and set aside a card machine just for you.