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As current Chief Executive Officer Josh Saunders prepares for his upcoming departure from Visa (NYSE:V), speculation as to who will be his replacement has begun. While he has yet to formally announce his retirement, the company’s board has already started looking for his successor, according to the Wall Street Journal.
WSJreports that the leading contender for the position is Charles Scharf, a former Visa board member and JPMorgan (NYSE:JPM) banker. However, the board is considering several candidates. Elizabeth Buse, a group president responsible for overseeing Visa’s global sales, is the leading candidate from within the company.
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Saunders held the position of CEO of the company for five years, during which Visa became a public company and weathered the financial crisis. The challenges facing the company’s next CEO will be no less difficult than those Saunders faced during his tenure. Although Visa is a leading electronic payment company, competition from nontraditional payment services like eBay’s (NASDAQ:EBAY) PayPal has grown.
Furthermore, merchants have begun to complain that the rates Visa sets are too expensive. Visa, according to the Journal, determines the rates that thousands of banks charge merchants each time a card is used. The company is able to make that decision because it provides the technology that allow banks to issue such cards.
In regards to traditional competition, Visa is far ahead of its smaller rival MasterCard (NYSE:MA). According to the Nilson Report, Visa credit and debit cards accounted for $1.2 trillion worth of U.S. transactions in the first half of 2012. That is more than double the number of MasterCard transactions in the same period. However, MasterCard CEO and former Citigroup (NYSE:C) executive Ajay Banga is “widely credited with breathing new life into MasterCard since taking over as CEO in 2010,” according to the Journal.
“Visa really needs to think about bringing in a CEO who can rival Ajay in his communication ability,” said Sanford C. Bernstein analyst Rod Bourgeois in an interview with the publication.
Charles Scharf could fit this bill. As JPMorgan’s Chief Executive Officer of Retail Financial Services, he has close ties to Visa. According to the Nilson Report, the bank is Visa’s largest credit-card issuer, with 66.4 million cards. Scharf began his career in the late 1980s as JPMorgan CEO James Dimon’s assistant at Commercial Credit, a predecessor to Citigroup.
The Wall Street Journal reported that sources within the company said, “the board is primarily focused on choosing a candidate who has unimpeachable ethics, has worked through difficult situations, and has experience in growing a business.”
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