Three months after American Telephone & Telegraph Co. launched a fast-proliferating credit card that works both for long-distance calls and ordinary purchases, MCI Communications Corp. is scurrying to catch up. Yesterday, it announced it had teamed up with the largest card-issuing bank, Citibank, to mass market a similar service.
The 14.6 million holders of Citibank Visa cards can now register by telephone or mail for MCI calling. After that, they will be able to charge long-distance calls to their credit cards after dialing MCI access codes.
The U.S. credit card industry has watched in amazement as AT&T has signed up more than a million customers for its "Universal card," a combined calling and credit card that it began offering in March in conjunction with a newly created Georgia bank.
AT&T's move ruffled some fur: Citibank officials said they later gave a major telecommunications contract to MCI rather than market leader AT&T in part because AT&T had become a competitor in the credit card field. Citibank and other major card-issuing banks also filed protests with regulators saying that AT&T's policy violated state and federal rules.
Last year, MCI announced a deal with various Visa-issuing banks for dual-purpose cards, but it has remained in the pilot stages. The teaming with Citibank, it hopes, will get it into big-time volume. In several months, Citibank plans to offer MCI services to its more than 12 million Mastercard holders as well. US Sprint, which ranks third after AT&T and MCI in the long-distance market, also has a deal with Visa.
MCI is hoping to draw customers through the ease of registration. AT&T's customers have to get an entirely new card; the Citibank/MCI plan allows people to register existing cards. Citibank, similarly, hopes the additional service would lead to more credit cards being issued. It charges no extra fee for adding the ability to charge MCI calls.