Ex-Citicorp Executive Hired To Upgrade MasterCard Net

NEW YORK -- MasterCard International has named a former Citicorp technology executive to manage a major upgrading of its global telecommunications network.

David H. Starr will oversee a five-year, $65 million upgrading of hardware, software, and communications technology for Banknet, which MasterCard issuers use to receive authorizations and clearing and settlement information on credit card transactions.

Formerly director of information technology for Citicorp's payment products division, Mr. Starr joined MasterCard last month.

To Hold Fees Down

MasterCard plans major changes to improve Banknet services and reduce the cost of operating the network, thus curbing increases in transaction fees that financial institutions pay.

The company plans to upgrade hardware and software systems to improve reliability and shorten transaction response times.

To cut costs, MasterCard plans to turn over part of the data processing and communications operation to an outside company, probably this year. MasterCard expects to save 20% in operating costs over five years through the arrangements, known in data processing circles as outsourcing.

Evaluating Vendors

Mr. Starr said MasterCard is evaluating companies it may hire to manage part of the Banknet communications network. Those under consideration include long-distance phone companies such as American Telephone and Telegraph Co., MCI Corp., and British Telecommunications PLC.

"We want to have enough control so that we can get the authorizations through with total reliability," said Mr. Starr. "I think it will be some kind of hybrid arrangement where we hire someone to manage part of the network and not pass the whole thing over to an outside firm."

Mr. Starr's department expects to complete by July 31 an overall business plan for the enhancement project, which is called Omni. A decision regarding outsourcing vendors will be made later.

Choosing New Hardware

Meanwhile, one of Mr. Starr's first tasks is choosing new computers to process credit card transactions flowing from Banknet to issuers' host systems. The computers are acquired and maintained by MasterCard but installed in the banks' data processing centers.

The card company now uses outmoded Series 1 computers from International Business Machines Corp. About 300 Series 1 computers, which are difficult and expensive to maintain, are installed at MasterCard issuing banks. All will be replaced in the next year.

PHOTO : David H. Starr Taking on a $65 million project

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