MasterCard International and its Mondex subsidiary pulled out all the stops last week to demonstrate momentum for their smart card strategies.
Hoping to leave an impression on thousands of people passing through Cardtech/Securtech, the annual exposition sponsored by an affiliate of the Thomson Financial group that also owns American Banker, MasterCard introduced a set of smart card services for corporations and government agencies.
Working with the systems security vendor Logicon Inc., the smart card supplier Orga Card Systems, the access control company Casi-Rusco, the fingerprinting company Identicator Technology, and a digital certificate infrastructure from GTE Corp., MasterCard announced four applications for the Multos operating system.
Multos is vying for card industry allegiance with Visa's Open Platform specification and Microsoft Corp.'s operating system extension, known as Smart Card for Windows. The more reality that can be attached to these systems' promises, the better, and all three organizations commanded attention last week.
Visa's progress included an Open Platform trial with a U.S. government agency. (See related article on page 13). Microsoft announced several pilots and attracted larger-than-expected crowds to two days of workshops for software developers.
Steve Abrams, MasterCard senior vice president of global corporate product management, described its Multos corporate applications as a "world first," marking "the dawn of widespread implementation of smart card technology." It shows how MasterCard is "putting to work" an infrastructure that has been several years in the making.
MasterCard also said that its Mondex USA franchise had two licensees ready to put the electronic cash technology to work: Comerica Inc. of Detroit and KeyCorp of Cleveland. Until now, all known U.S. implementations were by equity owners of the domestic franchise, such as Chase Manhattan Corp. and Citigroup's Universal Card Services unit.
Comerica is planning a 250-employee test of a Mondex electronic purse in the third quarter as part of a multi-application service it is developing. Comerica is also said to be the first customer of Hitachi Ltd.'s "Mondex in a Box," a service bureau arrangement for starting e-purse programs and processing transactions.
KeyCorp is in an evaluation mode, drawn to Mondex because it is "the only electronic cash application that can handle multiple currencies with global interoperability," said David Neistadt, executive vice president, Key Electronic Services.
The MasterCard-Mondex tandem also disclosed that the card subsidiary of Mycal Corp., a Japanese retailing organization, will begin "the world's first total migration from magnetic stripe cards to multi-application smart cards." Creating what it views as a "lifestyle card" with loyalty points and other services on the Multos platform, Mycal said it will have 10% of its five million silver and gold MasterCards converted in the fourth quarter. The rest would be done at the rate of more than 200,000 a month, into 2002.
London-based Mondex International used Cardtech/Securtech to debut a "one-card solution" with a chip that is usable in conventional terminals and in the "contactless" variety common in mass-transit entryways. It also demonstrated an electronic cash service on the Internet, incorporating technologies from partners such as Intertrader CashBox, SmartAxis, Applied Communications, and Hitachi.
Providing an assist in the loyalty area, Gemplus of France announced the immediate availability of a "loyalty on Multos" module, which it said has already been adopted by Latin American financial institutions.
Nick Habgood, chief executive officer of Maosco Ltd. in London, said the big smart card vendor's GemClub application would be a boon to "the many issuers around the world who are looking to exploit Multos to provide added value and differentiation."
Maosco, the industry consortium that manages the Multos standard, asserted its independence at Cardtech/Securtech with an exhibit booth separate from Mondex's.
In an interview, Mr. Habgood said commitments have been received for 14 million Multos cards-10 million of those would be in Japan. He said Multos, through Maosco's participation, has support from the MasterCard, Discover, JCB, and American Express brands. Given that American Express is expected to run an application of Proton-a smart card system partially owned by Amex and Visa International-on Multos, he suggested that Multos is holding its own against Open Platform.
