The Revolution Within
Dee Hock gathered a group of fellow bankers together in Sausalito, California, in 1969. They were tasked with redefining the first general purpose credit card, BankAmericard, which was plagued with fraud and bad debt. But his curiosity led to far more than revamping a struggling product. It led to the creation of Visa.
Hock, who founded the payments company, died in July at the age of 93. His legacy is the modern electronic payments system that continues to shape how people spend money.
“Dee would be the first to admit that he didn’t invent the credit card,” wrote current Visa Chairman and CEO Alfred Kelly Jr. in a statement. “He did, however, apply a combination of vision, drive and no small amount of brinkmanship to forge an organization that has changed the way the world pays over the course of the last 60 years.”
In the late 1960s and early 70s, Hock ruminated on how computers and telecommunications would change how people spent money. The new credit card and its precursor, charge cards, were gaining acceptance among consumers and retailers, but carried complicated issues around money transferring and fraud. He saw a need for a system that could transmit payments faster, across the globe, between banks, users and retailers. He also realized that no one institution could create such an innovative electronic payments system; instead, he convinced a number of banks that issued BankAmericards to collaboratively build this new system.
“[H]is true brilliance was realizing that such a system would require a fundamentally different sort of organization than the traditional franchise model that the BankAmericard had been using,” wrote Stripe CEO Patrick Collison in a statement. “A truly global payment system required something akin to a financial UN: a social structure in which multiple competing institutions could cooperate, just enough, to build something far bigger than any one of them could build alone.”
Fueling his curiosity and creativity was Hock’s habit of looking deeper, of trying to get to the essence of something. According to Kelly, Hock started with a set of questions that often inspires me in my reporting: “What is a bank, and what is money?”
The answers to those questions revolutionized how most people spend money today. Almost three-quarters of noncash payments in 2020 were through cards, according to the Federal Reserve’s 2020 payments study. Hock envisioned a world of convenient, universally accepted electronic payment — and he helped build it.
At a time when banks struggle with payments innovation — and sometimes find themselves pitted against outside disruptors who think they can build a better system — Hock’s legacy proves that powerful, world-shifting change in the financial services space can come from within.
• Kiah Lau Haslett, managing editor of Bank Director