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Description
Broox Peterson is a prominent practicing international business attorney. He was a Senior Vice President and Assistant General Counsel with Visa International for more than 15 years, and with Visa U.S.A. for six years. While at Visa International headquarters he handled international business transactions, international regulatory matters, other legal matters for the association, and was responsible for legal liaison with the European Union region of Visa International. When Mr. Peterson moved to Visa U.S.A. he was responsible for business transactions with the bank members of Visa U.S.A., and for governance issues, and other association legal matters.
Q: Visa and MasterCard used an intriguing form of joint venture, the global not-for-profit joint venture, to introduce credit card products that have become familiar to nearly everyone. I'd like to discuss this with you. What is a "global not-for-profit joint venture"?
A: Don't forget the "between commercial entities" part, since it is an important distinction. There are many non-profit joint ventures between non-profit entities like hospital groups and other affiliations of charitable organizations, but not that many between commercial entities. Any commercial entity can be structured and operate as a non-profit entity, just as any non-profit entity can participate in activities that for-profit commercial businesses do.
Q: What type of business model do commercial entities use for global not-for-profit joint ventures?
A: Perhaps the prime models for the kind of joint venture I am talking about have been MasterCard and Visa, the credit and debit card associations, although they are both moving away from that model now. This has also been used in professional sports, publishing, and other lines of business.
Q: How would you describe the model chosen by MasterCard and Visa?
A: Both MasterCard and Visa were established as Delaware membership associations owned by their customers, the banks around the world that issued MasterCard or Visa Cards. These membership associations were operating companies in themselves, providing system operating rules, product development, marketing services, and an electronic global payments communications and processing network that enabled any card issued by any member bank to be used... |
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