As Visa International and Microsoft Corp. unveiled a technology standard for payments over open computer networks like the Internet on Wednesday, MasterCard was conspicuously absent.
Both card associations expressed regret about the rift, which surfaces three months after they had announced a joint effort to agree on a common operating code much like they have for traditional point of sale payments.
The Visa-Microsoft specification - 81 pages of software documentation for acceptance of on-line credit card payments - is the culmination of a research and development effort launched last November.
MasterCard had pursued a similar objective with Netscape Communications Corp., the prominent provider of Internet browser software. In June, MasterCard and Visa said their separate efforts would converge in a compatible specification.
Richard Lonergan, executive vice president, point of transaction for San Francisco-based Visa, said he was disappointed that MasterCard was not involved in Wednesday's announcement at a press conference in New York. "We'd like them to be here," he said.
MasterCard International spokeswoman Dorea Smith said the New York association views the Visa-Microsoft specification as "not complete" and inadequate for vendors to write interoperable transaction processing software.
She said Visa's action was "contrary" to the principle of "a single, open industry-wide specification."
Visa's documentation will be posted on its Internet site - and that of Microsoft. The free and open access via the World Wide Web is designed to encourage widespread adoption of the system, known as Secure Transaction Technology.
Warren T. Dent, director of business development for Microsoft's consumer systems division, said the system can "provide peace of mind" for on-line purchases. But he acknowledged that no security is invincible. Indeed, flaws have been reported in the data encryption method embedded in Netscape software.
Mr. Dent said that as at conventional points of sale, systems can be deployed that reduce and deter fraud. The Visa-Microsoft system is meant to do just that.
"What you do with cryptography today can be broken tomorrow," Mr. Lonergan said. But he said other technologies, such as neural networks, will be applied to bolster the antifraud system.
Mr. Dent said Microsoft would incorporate Secure Transaction Technology in its on-line service, the Microsoft Network, as well as in software packages such as Windows 95 and Money. But to take full advantage of the technology, individual financial institutions would have to install the capability to accept the encrypted information.
Mr. Lonergan said Visa was in a race against time to provide on-line security. Consumers are already making purchases over the Internet, he said, and the association wants to maintain the service quality consumers have come to expect and thereby "protect the integrity of the Visa brand."
Software vendors such as Spyglass Inc., a Netscape competitor, are expected by April to make available for commercial use software that includes Secure Transaction Technology. Software with the technology will also be readily available to consumers and others over the Internet.
A consumer could download the software and register a Visa card for certification over the association's network. The information will be coded and registered with digital signature keys. This data will reside on a personal computer's hard drive, to be activated when purchases are made. The cardholder information will be encrypted and delivered to Visa's system, bypassing the merchant.
Though the companies invested "millions" to create the technology, they are not looking for immediate payback. Mr. Dent said their interest is in promoting electronic commerce for long-run benefits.
Mr. Lonergan said the system will "make the Visa card even more valuable, providing more income for member banks."
