The Credit King: The Early Years of VISA Founder Dee Hock

You may not have ever heard of Dee Hock, but that is exactly how he wanted it. This founder of VISA, and the man who first helped conceive of a worldwide system for the electronic exchange of value, believed that if he was running the company properly, consumers would only benefit from the front-end services and not even hear about the back-end operations. In 2010, VISA earned over $8.065 billion in revenues.

Dee Ward Hock was born in 1929 in North Ogden, Utah to a father who worked as a utility lineman. He was self-educated and eventually found his way into the banking industry. At the time, however, the credit industry seemed to be on the brink of disaster.

“At the time, I was the assistant vice president of a modest bank in Seattle, Washington; one of the first six banks licensed by BofA in 1966,” recalls Hock. “By 1968, I was extremely concerned that the industry may go under and our bank’s investment with it.”

The idea that credit could be combined with the multiple merchant concept first came to life in the early 1950s. Prior to VISA, Bank of America’s BankAmericard had become the very first credit card with any success, but it soon faced competition from MasterCharge, a product of five other California-based banks which had decided to band together. Soon, a race to franchise the cards was underway.

“I was attending a meeting of all of the licensees of BofA which soon became a shambles of argument and accusation,” says Hock. “The BofA were desperate to know what to do. They proposed that seven people from licensee banks, of which I was one, form a committee to look into a couple of the more pressing operating problems and propose solutions.”

Fraud was engulfing the industry and the banks, with little experience or electronic capacity in this area, were suffering. But while Hock knew something had to be done, he believed this proposed exercise would take longer than the industry would survive at the pace things were going. He proposed an alternative.

“I suggested that the committee should look into some sensible way of organizing the whole of the licensee structure to examine all the problems and propose methods to get a grip on them,” says Hock. “It’s not an uncommon story. A naive young nobody, 38 years old, stands up in a confused meeting and makes a suggestion. In desperation, the licensees, knowing it won’t cost or commit them to anything, say, ‘Fine, let’s do it, but it’s your idea so you’re the chairman of the committee.’ I just walked into a set of circumstances that was a marketing success and an operating disaster with no intent but to do a bit of civic duty.”

That responsibility to civic duty would lead Hock into an entirely new career venture, and to new heights of success, the likes of which he had never seen before. Hock left that initial meeting chairman of the newly established committee.

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