Two years ago in Seville, Spain, at the most recent of Europay International's big membership conventions, Europay and MasterCard seemed to be playing out some sort of sibling rivalry.
Reconvening last week on the French Riviera, in the resort renowned for its annual film festival, the bank card affiliates and marketing allies engaged in a veritable love-fest, having buried the suspicions and recriminations that had threatened to distract them from more important competitive pursuits.
Speaking in the theater used by the film festival, the organizations' chief executive officers freely used words like "partner" and "embrace" to describe their revivified relationship. Robert Selander of Purchase, N.Y.- based MasterCard spoke of a "new spirit of cooperation" and paid homage to his Europay counterpart, Louis-Noel Joly, for facilitating it.
There is a "level of openness and candor that simply did not exist before," said Mr. Selander, who became MasterCard president in mid-1997 after playing a key role in patching things up with Europay.
Mr. Joly, who had just taken office at the time of the Seville meeting, said the partnership "is more healthy and positive today than it has ever been."
Several initiatives were announced at the Europay meeting, which was attended by 1,600 bankers and vendors. One was a platinum card that Europay said will complement its World Signia super-premium card in Europe.
The latter is designed for the top 1% of a bank's customers, typically those getting private banking treatment. Platinum goes downscale a bit, to the group historically targeted for gold cards. In that respect, the product would be similar to the rapidly spreading platinum phenomenon in the United States.
Cardholders get high spending limits and discounts at car rental agencies and hotels, including Avis and Summit Hotel Group. Future benefits may include discounts at Intercontinental Hotels, Hyatt Hotels, and Cunard Cruise Lines.
RBS Advanta, the U.K. venture formed by Royal Bank of Scotland and Advanta Corp., already has 80,000 platinum cards in that country. Europay also announced that MasterCard's U.S. Priceless Moments advertising campaign is being tested in Germany, France, Italy, and the United Kingdom. Much of the imagery was designed to be transferable to other languages and cultures. It remains to be seen how the tag line translates: "There are some things money can't buy, and for everything else, there is MasterCard."
Nowhere was the improved MasterCard-Europay climate more evident than in the area of smart cards, where Europay formally endorsed the Multos operating system that is closely associated with MasterCard's Mondex subsidiary.
In clarifying its chip card strategy by endorsing both Multos and the Common Electronic Purse Specification that Visa and others have been championing in Europe, Europay signaled its readiness to influence choices on a multinational if not global scale. Assuming two voices are stronger than one, Europay and MasterCard-Mondex might be a persuasive tandem.
"There is no reason for several different chip standards within the financial services industry," Mr. Selander said. "To ensure future success, I am calling for a single industry standard," MasterCard's Multos platform.
Calling attention to the wonders of Multos, conference participants were invited to add or delete functions on a smart card, among them MasterCard credit and Mondex electronic cash. This served the added purpose of showing how France's 30 million bank-issued chip cards, which are built to technical standards that predated current industry preferences, could make the transition to global compatibility.
"There are myriad domestic chip implementations" in Europe, said Henry Mundt, MasterCard executive vice president, global deposit access. "MasterCard and Europay can add value to this market by finding ways to enable these different chip applications to work around the world."
Eastern Europe still has catching up to do in terms of advancing payment cards, Alessandro Tedoldi, Europay's senior area manager for Eastern Europe, said in an interview.
Europay's initial focus is on debit. "The simple act of accessing a bank account is what we want to do," he said.
Consumers in those emerging markets still need convincing that banks will protect their money. "Our objective is to bring money out of the mattress and into the bank," he said.
Hungary and Poland are the most advanced in terms of issuing Maestro debit cards and in the number of private-sector banks, Mr. Tedoldi said. The banks in Slovakia will be the first to launch Maestro with a chip function, in November. This product has been specifically designed for Eastern Europe. There are five million Maestro cards in Eastern Europe.
Europay released its midyear statistics. Cards carrying a Europay or MasterCard brand reached 194.4 million at midyear, a 22% increase in 12 months.
Europay estimated that by 2000 there will be 266 million cards with its brands and that its market share will have grown to 62%, from 60% today.
Germany, where Europay banks have 94% of the market, reported a 13% increase in cards, to 75 million. Europay cards in Spain grew 166%, to 11.5 million. Cards in Turkey grew 96%, to 8.6 million.
Card growth in the United Kingdom was 33%, for a total of 10.7 million; in Italy it was 31%, for 10.2 million. Eurocheque, the old check guarantee product that was part of Europay's nucleus when the association was formed in 1992, is declining in popularity as debit cards gain. In 1989, 42 million cross-border Eurocheques were issued. By 1997, the total had declined to 18 million.