Visa U.S.A. is to drop all guidelines pertaining to whether a customer is allocated a platinum, gold or classic card.
Visa said the changes, which it announced July 31, represent the growing reality that the categories do not hold the brand power they once did. It also said that relaxing the requirements will open the door to new product offers.
The changes are "precipitated by what's already occurring in the marketplace," Sarah Thompson, a vice president in Visa's consumer credit card division, said in an interview last week. "Platinum is no longer a premium product. It's mass-marketed."
The issue of what makes a card gold or platinum has a colourful history. American Express Co., which in 1984 became the first company to offer a platinum card, trademarked the term early on; as individual issuers began introducing cards they called platinum, Amex cried foul, saying the products bore no resemblance to its own, which was aimed at the very upper crust.
Visa International sued Amex over its platinum trademark in 1996. In a settlement reached a year later, Visa issuers were allowed to use the term, so long as the cards were clearly labelled with Visa's brand.
In 1988 Amex sued MasterCard International over its use of the term Gold Card, which Amex said it had originated in 1966. American Express lost that case.
Visa's new rules acknowledge that the lines between product categories have blurred. The changes mainly will affect the perks currently required on premium cards, such as travel accident insurance and streamlined authorization at certain merchants like hotels, all of which will become optional for issuers.
Member banks will be able to reduce costs, since they will no longer have to pay for such across-the-board add-ons, Visa said.
