A high-ranking Citibank official has questioned the wisdom of promoting advanced card products and technologies in parts of Latin America.

Speaking at a marketing conference last week in Miami, organized by the World Research Group, Ruvan N. Cohen of Citibank said developing countries are not stable enough to sustain the necessary investments.

Mr. Cohen, who heads the Citicorp unit's Latin American card business, said the continent's banks have suffered repeated economic shocks and are ill-equipped to invest in smart cards and interactive banking technology that MasterCard and Visa are eagerly promoting.

Furthermore, he said, smart cards won't expand overall card usage in the region, because the new technology is aimed only at the upper segment of the consumer market.

"As we talk about leap-frogging technology," said the Citibank executive, "it's important that we don't leave the customer behind."

MasterCard and Visa are each sponsoring smart card and stored-value card tests in Argentina, Colombia, Brazil, and Mexico.

Visa has programs under way in Argentina and Colombia. A pilot in Brazil is expected to begin this year with 12 banks, 1,500 merchants, and 100,000 cards.

While Citibank is participating with Visa in Colombia, Mr. Cohen said the card associations are putting too much pressure on financial institutions to lay out the money needed to propel the technology.

"The pilots are fine," he said, "But beating drums and saying that in two years people need to do this - because otherwise Microsoft will come in and do it - isn't."

He added that Citibank, which has decades of experience in Latin America, takes a more measured view of the market, projecting only five years into the future. In planning and promoting new technologies, the card associations presumably expect returns over a longer time frame.

But Visa has market research showing banks, merchants, and consumers are "ready, willing, and able to try the new technology," said Day J. Jimenez, the association's vice president of business development for Latin America.

"We are not rushing the market," Mr. Jimenez said. "We are going slowly because we want to confirm what our research is telling us."

The cost of entry is Mr. Cohen's main concern about technology investments.

He said the bank-owned associations should adopt "membership rules that protect those of us that have made the initial investment (and) guard against those people wanting to come in and use the groundwork we laid."

The 12-year Citibank veteran said that when the bank entered the Canadian market in the late 1980s, it had to pay Visa a premium. It was meant to compensate for earlier market-development costs.

No such Visa policy currently applies to Latin America.

In contrast to Mr. Cohen's wariness toward future investments, Luis Munoz, a Colombian banker, was effusive about the MasterCard smart card project he is heading.

Mr. Munoz, a vice president of Conavi Bank, said, "It is no longer a pilot. It is working."

Conavi plans to convert its million debit card accounts to smart cards, and the bank intends to convert its credit cards eventually.

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