In an effort to add coherence to its smart card capabilities and help member banks deploy them, Visa U.S.A. has introduced a program called Visa Smart.
Visa is providing information and guidelines to banks that want to offer the technology, in much the same way the association does for credit card issuance.
The program, which includes planning and implementation help branded as Visa Smart Solutions, is seen by outside observers as the latest move in a chess match unfolding between Visa and MasterCard.
Visa continues to promote its idea of an open smart card operating system, taking frequent jabs at MasterCard International's competing Mondex system. The Visa camp characterizes Mondex's operating platform, Multos, as a proprietary standard lacking the openness and flexibility of the Java- based system Visa has endorsed.
Officials on both sides have held open the possibility of finding common ground, but for now Multos is incompatible with the Java programming language and the associated application programming interface, or API, championed by Sun Microsystems Inc.
At the same time, Mondex officials say they are ready to accommodate Java if there is demand.
Visa wants to create tools that make it easy for banks to enter the smart card market at the lowest possible cost, said Diana P. Knox, senior vice president of chip products for Visa U.S.A., San Francisco.
"From our perspective, an open system is fundamental to driving the smart card industry forward," Ms. Knox said earlier this month when Visa Smart was introduced.
Ms. Knox said Visa wants to help members decide how smart card technology will play a role in future retail and commercial banking strategies. Once a bank decides to explore the chip market, Ms. Knox said, Visa can guide its first steps and show it how to launch a project quickly and easily.
From now on, Ms. Knox said, the association will attach consistent names to its products. "Visa Smart Credit" and "Visa Smart Debit" will complement Visa Cash, the stored value card already being deployed in numerous markets around the world.
Visa will also provide a list of partners-vendors and suppliers-fully briefed on the association's strategies and standards.
Schlumberger, one of the major France-based smart card system suppliers, announced it signed a letter of intent to be a Visa Smart partner. It intends to provide cards, terminals, and application development support for add-on services such as loyalty points.
"Visa has shown foresight in promoting a full range of open platform applications to its member banks and issuers," said Jacques Cosnefroy, vice president and general manager of Schlumberger Smart Cards.
Patrice Peyret, director of consumer transactions at Sun Microsystems' JavaSoft unit, said, "Schlumberger has been a very strong proponent of (the Java Card API) from the very beginning. As a pioneer in the use of Java Card technology, their participation in Visa Smart signals an emphasis on using leading-edge technology to help bring forth Java's promise of 'write once, run anywhere.'"
That slogan refers to the ability to develop programs for any type of computer system or device and provide upgrades "on the fly" via telecommunications lines-a major selling point to the banking and payments industries.
Mondex, too, has touted such upgrade capabilities with Multos, which one consultant views as having stolen a march on Visa.
Jerome Svigals, head of the Redwood City, Calif.-based consulting firm Jerome Svigals Inc., said Mondex has made great headway in Canada, where all of the major banks have signed on, and is getting good results from its test in New York, which is a co-venture with Visa to test interoperability at the point of sale.
He called Visa Smart "highly defensive." By introducing the Visa Smart Credit label, he said, Visa is lowering its resistance to the idea of adding chips to credit cards.
"Visa may be trying to offset any additional moves by Mondex," Mr. Svigals said.
Ms. Knox said Visa aims to use smart cards to solve business problems, not just improve credit cards. With on-line credit card authorizations in the United States cheap and ubiquitous, chip cards' business justification will have to come from value-added services, she said.
"There is no benefit to a bank, cardholder, or merchant to just put a chip on a Visa card and not deliver anything more than the payment services we have today," Ms. Knox added.
For example, she said, Visa Cash is being used in veterans hospitals in Tampa and the Bronx, N.Y., to reduce the costs of meal services.
"Multifunction Visa smart cards are real today, and we are developing our open platform to enable financial institutions to flexibly utilize whatever range of applications they choose," said Ms. Knox.
An employee pilot at the Bank of America Clock Tower Building in San Francisco is one multi-application example. Visa also said a large corporation will issue corporate cards with chips later this year to streamline business travel processes.
"As we learn about merchant and consumer acceptance and where the business case is for chip, you will begin to see chip cards emerge more rapidly," Ms. Knox said.
Edward Dixon, a MasterCard spokesman, said Mondex is on schedule to deliver the first cards on the Multos multiple-application operating system in the second quarter.
"The Visa system and the Mondex system are similar in that they will both be able to run different programs, like debit, credit, and stored value," Mr. Dixon said.
"The goals of both of the products are similar-delivery will be the difference," Mr. Dixon said. "Who delivers first and which one runs the best will decide what members do."
