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American Express and JCB have reached an agreement to acquire each other's transactions in a number of countries, vastly increasing their reach in markets where they are weak.
As the world's second largest credit card market, Japan has an appeal to U.S. card issuers seeking to expand beyond their North American base. However, the country traditionally has been a difficult place for outsiders to gain a foothold.
"Japan is very much focused and trained on supporting domestic brands," says William Keenan, president of the Hockessin, Del.based consultancy DeNovo Corp. "That makes it difficult for foreign companies to move in."
That may be changing, however, as evidenced by a merchant-acquiring partnership recently announced by American Express Co. and JCB Co. Ltd., Japan's largest credit card issuer with 34 million cardholders. Under the terms of the agreement, JCB will become a merchant acquirer for AmEx in Japan and offer its merchants the chance to accept AmEx cards in addition to its own. In exchange, AmEx will acquire transactions for JCB in Canada, New Zealand and Australia as well as in the U.S., where AmEx will program its terminals to accept JCB cards. The agreement will be implemented in phases beginning in spring 2001.
The countries that will increase JCB card acceptance were chosen as a reflection of Japanese travel patterns, says Dwane Krumme, general manager and executive vice president of Los Angeles-based JCB International Credit Card Co....