Three influential bank credit card associations have completed the second phase of a project to set technical standards for worldwide use of smart cards.

The project, under the joint supervision of Europay International, MasterCard International, and Visa International, is-slated for completion by yearend.

"We are looking at three documents being prepared, with each one building on the previous one," said Philip P. Verdi, executive vice president at MasterCard International.

"When completed, [the documents]- Will allow a terminal vendor or chip manufacturer to begin to think about. creating terminals and chips that would work on a global basis for MasterCard, Visa, and Europay," Mr. Verdi added.

The goal is to establish a global system capable of processing smart card transactions as efficiently as standard card transactions.

Experts view the effort as a sign that smart Cards which resemble standard credit or debit cards but also carry a computer chip that expands their utility, are close to entering the U.S. consumer market.

Executives from the associations said applications such as an electronic purse, in which smart card chips can be loaded and reloaded with funds that are debited at vending machines and point of sale terminals, could be widely available in the United States by 1997.

Both Visa and MasterCard plan to test smart card programs next year.

MasterCard announced this week that its first application for them would be the electronic purse.

In the latest step toward industry standards, the,associations have established technical and logistical specifications for the interaction between a smart card's chip and point of sale terminals. This second phase of the project addresses these areas:

* The data elements to be contained in the chip, including account numbers, expiration dates, transaction counters, and cryptographic security information.

* The process by which point of sale and other terminals determine what applications a particular card carries, and which application is chosen when the card is presented.

* The structure and coding of the messages that travel between the chip and the terminal.

The first phase, completed in June, established specifications for chip and terminal manufacturers; the third and final phase will outline how smart cards and point of sale terminals will actually work.

"I think the entire financial industry is excited in the sense that once we finish this document, worldwide intemhange will be able to be implemented," said Jean McKenna, vice president in Visa International's technology development unit.

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