The economics of smart cards continue to suffer because the financial industry has failed to unite on technical standards, Wells Fargo Bank executive vice president Dudley Nigg said at the Cardtech/Securtech conference this week.

He was not alone in that view.

At a seminar on "Changing the Face of Money," an annual feature of the international card technology gathering, executives of MasterCard, Visa, and American Express essentially agreed with Mr. Nigg.

Their accord indicated that these competitors may be getting closer to common ground on issues that generated much argument and controversy in recent years. But they still have yet to link arms in total harmony, suggesting that this is no quick fix.

For example, Visa, MasterCard, and MasterCard's Europay affiliate have endorsed the EMV standard for chip card acceptance at points of sale. MasterCard, Visa, American Express, and others back SET, the Secure Electronic Transactions specification for Internet payments.

MasterCard and Visa are discussing ways of bridging aspects of their standards between the physical world and the Internet, said MasterCard senior vice president Richard Phillimore.

Yet the two bank card associations are still bickering about their chip operating systems. Visa backs an approach based on the Java programming language. MasterCard and its Mondex affiliate tout Multos, contending it is flexible enough to accommodate Java and other languages, while Visa argues Multos does not fit its definition of "open platform."

Mr. Nigg of Wells Fargo, one of the most vocal advocates of advanced card and Internet systems in banking, said he and others in the industry must share blame for not pushing organizations they own toward a consensus.

Mr. Phillimore expressed hope that an industry group like the Bankers Roundtable's Banking Industry Technology Secretariat might help promote order.

"Technology is too expensive and complex to be a real differentiator," Mr. Nigg said. Competition can take place in the areas of branding, services, and functions on cards, he said, but "we can never win on the technology front."

Among those in clear philosophical agreement was Daniel Eitingon, president of global support services, Visa International.

"Standards are at the top of my list" of technology priorities, Mr. Eitingon said. "We need to partner up with all other interested parties. This is not the place for competition."

Mr. Phillimore said interoperability is one of the "pillars" of MasterCard's Mondex strategy, and it believes so deeply in its multi- application operating system standard that it has turned its management over to an independent consortium, Maosco Ltd. "This is designed not to be a MasterCard-controlled vehicle," he said.

"The good news is that we have smart cards all over the world-they are no longer a technology of the future," said Glenn Weiner, American Express' vice president for electronic commerce. "But there are obstacles, the most significant being interoperability," which he defined as "the ability of customers to use their cards anywhere, any time, for any function."

"There is a crying need for an open and interoperable infrastructure," Mr. Weiner said. He said American Express is trying to do its part by licensing its multi-application file structure "on a commercially reasonable, nondiscriminatory basis."

American Express has also joined the Global Chipcard Alliance, which supports global standardization and interoperability but has yet to attract members from the banking industry. Mr. Weiner conceded that "interoperability" can be used loosely, but he underlined that American Express insists on a true coexistence of financial, travel, telecommunications, and other applications.

"You will be hearing about additional members in the very near future," Mr. Weiner said after listing current GCA members, including IBM, Microsoft, NCR, leading chip card makers, and several international telecommunications companies, which were the original organizers.

Mr. Nigg, chairman of the Mondex USA board by dint of Wells' 30% shareholding, lamented the inability to translate agreed-upon principles into coherent policy.

"We need to get to a common technology," Mr. Nigg said. Referring to the joint Mondex-Visa Cash trial in New York City, he said, "It is sad that we need a giant application for the Upper West Side of Manhattan just to show that these technologies can work together-and that they struggle to work together."

He said makers of point of sale and card-reading equipment "would love us if we got to one technology so they can build on it." But he also criticized the vendors for not doing more to reduce hardware costs in parallel with the declining costs of computer chips.

"We need more innovation there," Mr. Nigg said. "It cries out for cheaper alternatives. It is worrying to me that (Microsoft's) WebTV has smart card capability, but we are hard-pressed to find a personal computer with a keyboard that is smart-card compatible."

"If a banker, Visa, and MasterCard all say the same thing, it says a lot," Mr. Eitingon said after the series of Cardtech presentations. But getting them to participate in a formal standards forum may be something else entirely.

"We cooperate in some areas," said Mr. Weiner of American Express. "Could we be doing a better job? Sure."

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