Richard Phillimore, MasterCard International's senior vice president of chip technology, is leaving to join the smart card upstart Publicard Inc.

The move comes amid a restructuring of Mondex USA and rumors of further reorganizations of MasterCard's smart card activities, but MasterCard officials and Mr. Phillimore said the timing was purely coincidental.

Mr. Phillimore, 52, will officially move into his role as Publicard's executive vice president of smart card businesses within a few days.

"He is going on to what we consider a really big role in the chip business within the U.S. market," said G. Henry Mundt 3d, executive vice president of global deposit access at MasterCard in Purchase, N.Y. "This is (a job) that signifies that chip will take off in the U.S. market."

Mr. Mundt, who will take charge of Mr. Phillimore's group in the interim, said a successor would be named soon. He hinted that the person will come from within MasterCard.

In two years at MasterCard, which he joined from the association's Europay International affiliate in Belgium, Mr. Phillimore built up chip card capabilities, including an internal support infrastructure for the technology. On the conference circuit he articulately defended Mondex against attacks from Visa and its allies.

At Publicard, based in Fairfield, Conn., he will be responsible for developing and managing existing smart card businesses and identifying acquisition targets. He will also sit on a committee consisting of the chief technology officers of companies Publicard has already acquired.

Publicard is betting that the U.S. smart card market will grow through specialized adaptations such as transportation and laundry machines.

"We're not going for mass-market implementations" such as European electronic purse successes, Mr. Phillimore said. "I don't think that's how the U.S. will play out.

"We're seeking to build a group of companies with different but complementary disciplines to address the level of market demand for the moment, but with the expectation that the U.S. will adopt the chip technology in a significant way over the next four to five years."

Agreeing with a growing body of opinion, Mr. Phillimore contended that chip technology leadership will come not from banking but from such areas as Internet commerce, vending machines, card-dispensing terminals, and telephones.

Publicard's string of acquisitions will be its "unique strength," he said. They comprise "a collection of wisdom as to how the market will play in the U.S.," he said.

Publicard-Publicker Industries until last year-traces its history back to 1913, when it specialized in alcohol production. More recently focused on laundry and other vending-type systems, it began accumulating chip assets in 1998 with acquisitions of card-reader vendors Tritheim Technologies and Greenwald Intellicard.

Publicard recently signed letters of intent to acquire Greystone Peripherals Inc., a computer product developer in Los Gatos, Calif., and Amazing Smart Card Technologies Inc. of Santa Clara, Calif., which produces smart card systems for satellite television, electronic commerce, and other applications.

Publicard raised $10.3 million through a private placement of stock last September, and began trading Dec. 22 on the Nasdaq National Market System.

"They're assembling pieces to be able to offer a broad array of solutions to the smart card industry," said Dan A. Cunningham, president of the Smart Card Industry Association. "They're trying to be a full-scale player."

Mr. Phillimore said he is looking forward to "being in on the ground" of something new. He said Publicard is "absolutely on the money for the U.S. market."

Before joining Europay in 1989, Mr. Phillimore spent 25 years at National Westminster Bank in London.

Robin Townend, who preceded Mr. Phillimore at MasterCard and is now chief executive officer of Cardis BV, a Dutch smart card start-up, said he was not surprised by the move.

"It seems standard practice within MasterCard," he said. "They get a team together and then every two years it goes through a shake-up."

But executives with experience in this emerging industry tend to move around. After a long career at Barclays Bank, Mr. Townend joined MasterCard in 1994 as senior vice president of chip card technology, in tandem with former AT&T executive Diane Wetherington as senior vice president of chip card business/marketing.

Both left as MasterCard turned its attention to Mondex International, of which it agreed to acquire 51% in late 1996. Mr. Townend worked for Intellect Electronics of Australia before taking the Cardis job in 1998.

"Richard's move is just another indication that everybody in the smart card business is searching for a way to make this work," said Janet Crane, who just stepped down as CEO of Mondex USA. "He is a terrific guy who got a great opportunity."

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