Banc One Corp.'s First USA unit has teamed up with CyberMark to combine a conventional credit card with a smart card.
Marketed to Florida State University football enthusiasts, the card can hold in its computer chip up to $100 of cash value that can be loaded at machines in Doak Campbell Stadium and spent at concession stands and certain other merchants.
The issuers said the MasterCard-branded product is the first one publicly available in the United States with both a credit service-the back of the card has a standard magnetic stripe-and stored value in a chip.
It provides a glimpse at how more than one payment service can reside on a multiple-application smart card, a vision that MasterCard International, Visa International, and many other enthusiasts and vendors of the technology have been articulating for years.
"We plan to offer smart card technology to many of our other affinity, military, and professional sports partners," said William V. Nutting, executive vice president of partnership marketing at First USA, Wilmington, Del.
With a top 5 credit card issuer promoting it, the smart card may pick up some of the marketing momentum that has been conspicuously lacking on this side of the Atlantic.
"Combining credit card functionality with chip-based stored value is a natural way to begin moving smart card technology into the hands of the public," said James B. Graham, chairman and chief executive officer of CyberMark, a Columbus, Ohio, system developer involved in the Florida State and other campus smart card deployments.
CyberMark is owned by Battelle Memorial Institute, Sallie Mae, and Banc One's Columbus-based rival, Huntington Bancshares.
First USA and CyberMark said they plan to enhance their cards in the future with customer loyalty programs, Mondex electronic cash, and chip- based debit and credit by upgrading to the Multos operating system.
George Wallner, chairman of the point of sale equipment producer Hypercom Corp. of Phoenix, has long advocated introducing chips on a credit card foundation and systematically broadening their applications. He said First USA is on the right track.
"The only issue they face is that the cost of the chip is difficult to justify using only the stored value function," Mr. Wallner said. "All of the organizations that tried similar things overseas are looking to put multiple applications on the chip."
He said it will be far less painful and expensive if "banks focus on low-end technology in the beginning (and) don't go to these very expensive superchips."
The credit portion of the Florida State card has a 3.9% introductory interest rate on both purchases and balance transfers. That jumps to 9.99% after five months, and First USA said its credit lines will go as high as $100,000.
The card comes with $25 of cash value already loaded as an incentive to try the purse function.
First USA is contributing to an ironic convergence in major credit card banks' technology decisions. Though it and Banc One have historically been more closely allied with Visa than MasterCard, they are issuing a MasterCard smart card with intentions of moving toward the Multos platform that MasterCard and its Mondex International subsidiary support.
Meanwhile, MBNA Corp., long a MasterCard loyalist, is testing the Visa Cash technology at its corporate headquarters in Delaware.
Citicorp, the only card issuer larger than MBNA, is testing Visa Cash in the United States and other countries but also owns 10% of Mondex USA as a result of its acquisition this year of AT&T Universal Card Services.
Might the U.S. bankers not be so dogmatic about the technical controversy that has split the two global bank card associations?
Philip Yen, senior vice president of Visa, who is understandably partial to its chip operating system based on the Java Card application programming interface of Sun Microsystems Inc., said at an international media seminar in New York last week that Visa is willing to meet its competitor halfway.
"We are willing to talk to MasterCard and Mondex" about compatibility or interoperability, he said, "but not when the terms are 'just use Mondex and Multos.'"
Mr. Yen also stressed that some of the smart card's greatest contributions to profits would come from cross-selling and extending customer relationships through the multiple applications. Besides credit, debit, and electronic cash, he listed public transportation and telephones, loyalty, electronic banking and commerce, secure access, and personal identification and authentication.
