MasterCard Plans S. Africa Test Of Its Smart Card Technology

MasterCard International said it is planning a six-month pilot test of its smart card technology in South Africa.

Amalgamated Banks of South Africa Ltd. and Standard Bank Investment Corp. have agreed to test MasterCard Cash in the Gauteng provincial area, which includes Johannesburg.

Noel Webb, Standard Bank's managing director of retail banking, said introduction of smart card technology would cost the two banks $10 million, Dow Jones reported.

The cards, with embedded computer chips, are designed to replace cash in small, everyday transactions. A chip that stores value will be added to selected customers' existing credit or debit cards.

"Once a card has been upgraded with the MasterCard Cash product, cardholders can transfer funds from their linked savings, checking, or credit accounts onto the card," said Angelo Letimier, general manager of MasterCard's Middle East and Africa region.

When the value has been spent, it can be replenished.

Jerome Svigals, a Redwood City, Calif.-based consultant, noted that the chip would perform only a stored value function. The cards will still use a magnetic stripe for credit or debit functions.

MasterCard said the chip cards will have been issued to 25,000 to 50,000 customers by 1997. More than 500 merchants are expected to accept MasterCard Cash.

Special smart card electronic terminals are required at participating banks and retailers to enable customers to both draw on and replenish the card's value from their bank accounts.

MasterCard began a test of the new cash cards in Canberra, Australia, last April through three major Australian banks. The stored value card is to be tested in New York City in the fourth quarter of 1996, along with Visa Cash, by Citicorp and Chase Manhattan Corp.

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