In a move to advance smart card adoption by banks, MasterCard and Visa are making their most significant move yet toward common technical specifications.

The agreement to work together on certain back-office aspects of smart card development marks a significant change from the associations' active promotion of their own operating platforms.

MasterCard supports Multos and owns 51% of Mondex International, Multos' developer. Visa supports Open Platform, which is based on Java technology from Sun Microsystems Inc. Executives from MasterCard International and Visa International were quick to say that their respective platforms will remain separate and that issuers will continue to have a choice.

Their ultimate aim may be to bring the technologies to a level of compatibility similar to that of the magnetic stripe card standard, which dates to the 1970s.

In a letter sent last week to MasterCard and Visa member banks, the companies said they aim to remove platform-specific barriers that hinder card issuers from implementing or changing their smart card choices, whether they be Multos, Java Card, or Smart Card for Windows from Microsoft Corp.

Right now, the software coding that allows issuers to personalize and activate new cards is different, and issuers have been asking for a more streamlined process, the companies said.

In the absence of compatible systems, developing a smart card program is "a big investment for an issuer," said Michael D.S. Harris, senior vice president of MasterCard's chip group in Purchase, N.Y. As a result, banks have been "unwilling to make an investment that would commit them to one platform for a period of time."

Because there was no collaboration between Visa and MasterCard, "similar functions have been coded in very different ways," Mr. Harris said. "What we're attempting to do through this is to facilitate a Multos application for one card coming over the line, and then handle an Open Card application for another card coming over the line."

The associations have set up joint working groups and plan to have new specifications available by midyear.

Because the initiative specifically addresses differences between the MasterCard and Visa platforms, it does not include American Express Co., which does not have a platform of its own. The American Express Blue card, which has both a chip and a magnetic stripe, uses the Multos operating system.

American Express could stand to benefit from the new collaboration, said Gail Francolini, vice president of the global chip marketing group at MasterCard.

American Express seems to want to "keep their options open," and "if they choose to actually switch platforms from Multos to another operating platform, the work that we are doing should help them," Ms. Francolini said.

The agreement comes on the heels of Visa's new company, GlobalPlatform Inc., launched two weeks ago to set up operating standards for multi-application smart cards among different industries.

MasterCard says a similar organization already exists with Maosco Ltd., the group that oversees the Multos standard. As a reminder of the competition that exists between the two camps, both MasterCard and Visa said at this time they would not join each other's groups.

Duncan Brown, director of research for North America at Ovum Inc., said the agreement is a diplomatic way to work together without either party's having to join the other group.

"Members of both organizations have been putting significant pressure on the associations to have a more united approach to multi-application smart cards," Mr. Brown said. "It's a practical, pragmatic approach without appearing for one party or both parties to be doing a U-turn. There's a reasonable amount of face-saving here."

"It's very positive that MasterCard and Visa are taking steps" toward interoperability, said Dan A. Cunningham, president and chief executive officer at Potomac Systems and Technologies in Potomac, Md. "It's one more barrier coming down."

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