BRUSSELS -- Europay International said it would invest more than $1 billion to convert its system to smart cards, beginning in 1996.

The European bank card association, of which has a marketing and financial affiliation with MasterCard International, and its board authorized the investment in chip card technology at a meeting in Bergen, Norway. They said they exited a payback over seven years of two billion European currency units equal to about $2.4 billion - in lower fraud and pressing costs.

Europay's board has been a strong advocate of cards with computer chips inside, After it formally endorsed them last fall, Europay joined with MasterCard and Visa International in a smart card specification project due to be completed late this year.

To encourage acceptance, Europay plans to provide incentires for point of sale terminals that accept both chip and magnetic stripe cards, with personal identification numbers or signatures, in on-line or off-line modes.

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