MasterCard International Inc. said it has completed a critical test of smart card technology according to specifications it developed with its European affiliate Europay and Visa International.
The announcement is just one of what could be a flurry of developments this year as the credit card associations pave the way for the new technology.
Working with several technology suppliers, MasterCard has concluded that a stored value card program can operate internationally and be fully compatible with the technical specifications.
The result is a step forward for MasterCard's plan to begin market trials in the coming months, and an endorsement for the joint Europay- MasterCard-Visa standards effort.
"The only way you can test an application is against the three-part specification, and our stored value application performed with great success," said Robin Townend, MasterCard's senior vice president of smart card technology.
"Members can be assured that our stored value application is EMV (Europay-MasterCard-Visa) compliant and that multifunctional applications will perform against the specifications in an unambiguous way," Mr. Townend said.
In a telephone interview last week from London, where elements of MasterCard's system were on display at the Smart Card 95 conference, Mr. Townend said the technical test allayed concerns that the joint specifications were merely theoretical.
He is now confident that the specifications can accommodate the applications under development, allowing a card issued in New York, for example, to be accepted seamlessly in another country.
With its announcement, MasterCard is beginning to show how it will build its own applications on the so-called EMV specifications.
To the extent that the in-house trials support the joint technical agreements, "we intend to share our results with the working group," Mr. Townend said.
"We share in the technical development and will discuss technical options with Visa and Europay," Mr. Townend said. "After the technical platform is completed, the gloves come off and we all compete on services."
The initial specifications were released last October for member and industry review. Updates, including terminal specifications, are to be completed by June, and annual revisions will follow.
In MasterCard's technical trial, Digicash B.V. provided its expertise for the card authentication method, one of the key components of the system package. Digicash, based in the Netherlands, is a leader in the development of value-transfer technologies for cards and computer networks.
MasterCard, which is working on other projects with competitors of Digicash, brought the Dutch company in for the stored value test and has not entered into any specific, longer-term relationship, Mr. Townend said.
The MasterCard trial also involved point of sale equipment from Verifone Inc., cards from the Orga Group of Germany, and chips from Thomson-CSF of France.
Visa refrained from making any similar pronouncements to coincide with the Smart Card 95 meeting. Visa vice president Mary Buckley questioned the significance of MasterCard's news in the context of what the card associations and their technology suppliers are planning.
"This will be a banner year," she said, adding that Visa's own working group on stored value cards is making major strides without calling much attention to itself.
