Mastercard to Move Into Phone Calling Card Field

Mastercard International said Thursday it is pursuing a move into the telephone calling card business, a venture that would create a partnership between the credit card company and major long distance carriers.

Under the plan, a Mastercard holder could use a credit card number to bill calls made on major long distance carriers such as American Telephone & Telegraph Co., MCI Communications Corp. and U.S. Sprint Corp.

Mastercard envisions new charge volume of at least $1 billion a year with the program, said Daniel Fox, a Mastercard senior vice president for systems and quality.

The company, with 90 million cards and $98.8 billion in charges nationwide last year, hopes to start the service by late 1993.

“We are very confident that we will,” Fox said. “We think that we’re going to have the largest credit calling card database in the world when we get the project completed.”

One industry analyst said the plan is a natural extension for an industry beset by heavy competition in a saturated marketplace where the average family holds more than half a dozen credit cards.

“The state of the industry is such that associations and individual issuers are looking to any and all things to create real value for their cardholders,” said Robert McKinley, president of Ram Research Corp., a Frederick, Md.-based firm that tracks credit card trends.

Under the plan, long distance calls would be billed and processed like a normal credit card transaction at a typical retailer, with the telephone companies paying Mastercard a small fee for the transaction, Fox said.

“We’re going to handle it just like it was any other sales transaction,” Fox said.

Regional Bell carriers such as Ameritech Corp. and Pacific Telesis Group, as well as small independent carriers, also are being pursued in the venture. “Any communications company that would want to participate is welcome,” Fox said.

Mastercard, if successful, would become the first credit card to be accessible to all carriers. Visa U.S.A and American Express Co. have more limited programs with no more than two of the three major carriers, according to a Wall Street Journal report.

AT&T; spokesman Mark Siegel wouldn’t elaborate on discussions with Mastercard other than to say the company “is always exploring opportunities aimed at adding flexibility and convenience to the way customers can use our network.”

AT&T; has its own credit card with the Visa and Mastercard brands, known as the Universal card.