If similar actions taken by competitors are any indication, American Express Co. must have done a lot right with the smart card standard that it proposed for the travel and entertainment industry.

Leading technology companies that do not always see eye to eye- International Business Machines Corp., Microsoft Corp., and Sun Microsystems Inc.-are all in the first group of licensees that American Express announced this week.

So were MasterCard International and Morgan Stanley Dean Witter & Co.'s Discover subsidiary, which compete directly with American Express.

Visa International, which had just announced broad-based support for its Open Platform smart card specification (see article above), said it intends to become an American Express licensee.

Companies in the same business are known to favor technical standards when deemed of mutual interest. In the smart card market, still in a formative stage with several competing technology alternatives, some companies are trying more than one.

American Express is in effect turning over to a committee a system it developed to put payment, hotel, airline, and other services on a single chip card.

Amex is also a member of Maosco Ltd., the consortium overseeing the Multos multi-application operating system. Multos grew out of the Mondex smart card venture, which is controlled by MasterCard International and is competing with the Java Card operating platform from Sun Microsystems as well as Microsoft's Smart Card for Windows.

American Express and Visa are co-owners of Proton World International, supplier of an electronic purse system that American Express has tested. Proton, based in Belgium is also in the Amex licensee group.

"We don't look at the world in a constrained fashion," said Glenn Weiner, vice president of smart card technologies at American Express in New York. "We say: Why can't we put Proton on Multos?"

He added, "We are not religious about technology."

Its stated desire to break down systems barriers and maximize customer service, convenience, and choice has turned American Express into a crusader for cross-system interoperability on a global scale.

It said it designed its "smart card multiple application framework" to allow any smart card to be processed across any network. It was introduced with the travel market in mind-airlines, hotels, car rentals-but Mr. Weiner said it is capable of having a broader impact.

The documentation includes a detailed description of the travel and entertainment data that can be stored on a smart card, such as frequent- flier account numbers and airplane seating preferences. The specification defines where the data are located on a chip and how they can be viewed or changed.

"We hope this is the T&E equivalent to EMV," said Michael Harris, vice president of chip delivery at MasterCard International. EMV, or Eurocard- MasterCard-Visa, refers to an earlier standard that defines how smart cards are handled at points of sale.

American Express first used the framework in a two-year test of automatic check-ins that it began in October 1996 with IBM and American Airlines. Similar pilots with Hilton Hotels and Continental Airlines followed.

Amex began offering the framework for general licensing in November 1997.

"The licensing of our framework to other companies, including some of our competitors, demonstrates our steadfast commitment to achieving global and open interoperability for multiple application smart cards," Mr. Weiner said.

For further development of the multiple application framework, American Express has formed the Interoperability Consortium. Starting this summer, the independent body will work on a set of common commands for multiple applications.

All licensees will be consortium members, and others can join at different levels with varying degrees of decision-making power.

Microsoft, which will be demonstrating the framework with Smart Card for Windows at the Cardtech/Securtech conference next week in Chicago, said it allows any card to be run on any platform.

Amex "stepped in and invited us all to embrace this specification, which says if you write to it, then your cards will work with everybody," said Michael Dusche, director of smart card marketing at Microsoft.

"A lot of the companies that are going to write some of the richest and most exciting applications for smart cards are very small," he said. "They can't invest their last $50,000 or $200,000 of a research and development budget on a moving target."

Duncan Brown, an analyst at Ovum Ltd., called the multiple application framework an "important development in the smart card industry." "Interoperability is the key to smart card adoption on a global scale. American Express is demonstrating that interoperability should transcend competitive differences."

The initial 13 American Express licensees are: Cards Etc., Continental Airlines, De La Rue, Discover, Europay, HTEC, IBM, MasterCard, Microsoft, Orga, Proton, Sun Microsystems, and Tesa Entry Systems.

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