SAN FRANCISCO -- Visa International said Tuesday it has formed a working group with MasterCard International and the European payment system Europay to develop a common set of technical specifications for so-called smart cards.

The new group's mandate is to produce specifications and software protocols in the first quarter of 1994. The standardization would accelerate the development and distribution of merchant terminals capable of processing the cards, said Roger L. Peirce, executive vice president of Visa.

"This allows people to innovate without the threat that Visa and MasterCard will [render their systems] obsolete," he said.

A growing number of banks are testing smart cards, which contain microprocessor chips capable of storing far more information than the magnetic stripe now used for identification of cardholders.

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