MasterCard Hires AT&T Unit For Processing Network Job

MasterCard International has awarded a major contract to AT&T Solutions to upgrade its worldwide technical infrastructure.

The decision represents a new direction for a bank card association that historically owned and controlled crucial aspects of its technology. The AT&T Corp. systems integration arm has a broad mandate to design, build, and support the computer and communications network, known within MasterCard as Banknet, that processes hundreds of transactions a second.

But like Visa and other multinational financial and payments organizations, MasterCard has been rethinking its approaches to technology management, leading to an overhaul of the technology itself.

Through what it described as a multimillion-dollar project with a two- year conversion period, Purchase, N.Y.-based MasterCard said it expects to "complete credit and debit card transactions anywhere in the world in the fastest, most reliable, and most cost-effective way possible."

AT&T Solutions will assemble a "virtual private network" - a global communications utility that is supposed to provide the control and reliability of private lines at much lower cost.

It also has the advantage of "scalability" - MasterCard buys a baseline capacity and can augment it at peak times.

Jerry McElhatton, MasterCard's president of global operations and technology, said he expects ultimately to exceed Banknet's current capacity while keeping his company "out of the capital equipment business."

The vendor bears the capital expenditures and the burden of keeping up with technological changes. AT&T Solutions also will be responsible for maintenance of customer-premises equipment and management of network engineering.

Mr. McElhatton said the choice of vendor was not made lightly. He was concerned about becoming overly dependent on a single supplier and employed consultants to study and test AT&T Solutions' capabilities, he said.

In the end, MasterCard was attracted by AT&T's global reach and track record and "didn't want to fragment" an already close relationship between the companies.

"AT&T Solutions clearly understood our business needs and was very innovative in demonstrating how they can help us manage our business today and in the future," Mr. McElhatton said.

MasterCard's announcement coincided with the formal opening this week of AT&T Solutions' $40 million global client support center in Durham, N.C., which has links to similar sites in Amsterdam and Singapore. The unit assigns "client-focused teams" to key network management tasks.

"MasterCard is leveraging AT&T Solutions' vision and expertise ... to provide a strong competitive advantage today and to assure it remains state-of-the-art into the future," said Rick Roscitt, the outsourcing unit's managing partner.

Mr. McElhatton said the upgraded network will be "transparent" to banks and fully compatible with changes under way at MasterCard's European affiliate, Europay International. Europay is working with several vendors but has not gone to a virtual private network, he pointed out.

Visa International, long dependent on mainframe-based computing, has embarked on a decentralized client/server course but has not made a major announcement like MasterCard's.

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