number of dolphin deaths caused by tuna
fishing by 9 8 percent.
When he signed on at Visa U.S.A. in
2004, Floum says, he made it clear that
while his availability for Earth Island
might shrink, his commitment to its
cause would not. He is a member of the
nonprofit’s board of directors, and offers
litigation and strategic advice. Every year,
when the environmental organization
holds its annual Brower Youth Awards
banquet, Floum shows up with a handful
of young Visa lawyers.
His transition to Visa has meant
giving up a few things. “[Litigation] was
something I personally did,” Floum
says. “Now I’ve got teams of people to
do that, but I don’t do it myself. We’re in
a case right now in Ottawa brought by
the Canadian competition commissions
against Visa and MasterCard. We have
rules to protect consumers against
surcharging. The commission takes the
view that surcharging customers is a good
thing, pro-competition.
“We say it’s a bad thing, anti-competition.”
As the “Microsoft of electronic
payments,” Floum says, Visa has no way to
avoid lawsuits. “As we continue to displace
cash and checks, litigants and regulators
are always going to look at us. There are a
couple of companies that are always going
to be getting antitrust challenges.”
His first assignment as general counsel,
bringing together the elements of Visa into
one entity, he says, “was a hard, sustained
push for years.”
But it was necessary. “There were
a number of reasons [Visa needed to
change],” Floum explains. “The most
important is this: For a company to
be competitive today, it needs to be
independent and shareholder-driven.”
Plenty of people, both inside and outside
the corporation, disagreed. Visa, after all,
had thrived under the association model.
It had thrived as a private company. “We
drove tremendous profits to the banks,”
Floum recalls. “Within the company, life in
the bank association was good.”
But there were wide-ranging, practical
and philosophical reasons for which
Floum felt change was necessary. “We’d
faced a series of lawsuits arguing that
we were a bank conspiracy, that the rules
we’d made were antitrust violations,” he
says. “I’m not saying those suits were
accurate, but we continued to get them.”
Visa needed to evolve, he argued, for
legal as well as business reasons. The
trick would be to convince a board of
directors, almost 4,000 employees and
a global network of banks that greater
success lay in undoing a seemingly
successful model.
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