To the Editor:

The joint smart card announcement by MasterCard, Visa, Chase, and Citibank ("Four Giants Join in New York Smart Card Test," April 11, page 1) brings a few questions to mind.

* What about antitrust considerations? New York was the jurisdiction used by several state attorneys general to prevent Visa and MasterCard from cooperating on their proposed Entree debit card. Although Entree was far from perfect, it set back the cause of electronic banking many years.

* If, as reported, the New York cards will be branded Visa Cash and MasterCard Cash, what happens to the Citibank and Chase brands?

* What about Visa rules that prevent debit card duality? Will Chase go with MasterCard and Citibank with Visa? Will both banks issue both, or will debit and credit card policies diverge?

* What about NYCE? The regional electronic banking network seems aptly named for a cash card venture, in that at least regional universality could be achieved. But in rationalizing their regional brands, will banks turn their card branding over to Visa? Or MasterCard?

* Will banks let a golden opportunity for a bank-branded system, or will MasterCard and Visa dominate?

Remember, we are discussing how best to serve and retain the customers banks already have. The industry had better think this over before it is too late. Once customers are accustomed to the global system brands, it will be very difficult to retain their attention and favor.

Joseph E. Wallace

Chicago

Editor's note: Mr. Wallace is director of System B Division, which promotes a card system that would emphasize the brand names of issuing banks.

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