With Visa's latest strategic alliance, its management shows that resting on one?s laurels is never a good way to get ahead of the curve. As dozens of Visa Cash card pilots are underway around the globe, the company is planning its next move: the Visa Open Platform smart card.

The card is Java-based and can run any application written in Java. In addition to traditional uses, like credit and debit, the new smart card will be able to handle Internet micropayments, new card-based home banking programs and additional security for electronic banking and commerce, among other things. Because applications can be downloaded onto the card from a PC or ATM, banks can develop customized, secure applications for high-value customers for lower cost than might otherwise be possible.

The cards, to be developed by New York-based Schlumberger, are also expected to facilitate more diverse and complex strategic partnerships. "The chip card gives banks the technology to take co-branding to a new frontier," says Phillip Yen, svp of Visa International's chip platform. Multiple applications from a number of companies-airline, retail etc.-can be loaded onto a single card. This could solve cost and time to market issues for banks. First, says David Weisman, Forrester Research analyst, banks can recoup the cost of the cards by charging companies fees to get on the card. Where banks and co-branding partners typically need to know one year out what program the card will be used for, the Java card lets players stock pile chip parts and wait until the last minute to decide which applications will be included, says Yen. And when applications are upgraded or enhanced, banks won't have to reissue new cards.

The first pilot is scheduled for July, to be followed by market tests. Widescale rollout is expected in 1999.

-prince tfn.com

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