Trintech Group has gotten itself on both sides of the MasterCard-Visa divide.
The payments software company, which has established a strong position in Internet commerce in part because of a close relationship with Visa, made its first major announcement with the rival association last week.
Under what was described as a strategic alliance, MasterCard International said it would offer its members Trintech consumer payment technology, with pricing incentives. The programs include NetIssuer, for managing and securing on-line cardholder transactions, and the ezCard virtual credit card system.
As it did in September when announcing a joint effort with International Business Machines Corp. to promote electronic commerce through mass distribution of digital wallets, MasterCard said it is trying to assemble tools that can ease financial institutions' cyberspace initiatives at favorable costs.
On Wednesday at the Cardtech/Securtech "Cards on the Net" conference in San Francisco, MasterCard vice president Carl Stefanelli said Trintech's technology includes wallet software that resides on server computers, which complement the client or consumer wallets in the IBM deal. He said client wallets distributed on compact disks are "a quick economical way to get wallets out."
Mr. Stefanelli said IBM's wallet software was the only one that supported the Secure Electronic Transaction protocol for Internet payments, "which was important to our European members." He said he expected Trintech, which has several other SET certifications, to get one soon on its latest wallet.
Arthur Kranzley, MasterCard's senior vice president of electronic commerce and emerging technologies and Mr. Stefanelli's boss, said that with the Trintech move, "issuers receive a cost-effective consumer payment product that extends their brand into the virtual world and maintains the primacy of consumer interaction."
Trintech systems, for example, are designed for customization and emphasis of a bank's brand. The company's chief executive officer, John McGuire, said, "We believe this technology will bring unparalleled branding opportunities for banks and result in a massive reduction in fraud and chargebacks."
NetIssuer provides considerable flexibility for risk management, and ezCard is supposed to provide at least as strong a connection to customers as in the issuance of a physical card. Virtual accounts can be opened quickly and are compatible with ECML, the Electronic Commerce Modeling Language, which MasterCard, Visa, Trintech, IBM, and others have endorsed for the digital wallet operations that "populate" merchant order forms with card numbers and shipping information.
"Trintech's approach opens the door for new on-line marketing strategies that can deepen existing relationships," Mr. Kranzley said.
In a way, Purchase, N.Y.-based MasterCard is gaining the benefit of investments made by its rival on the West Coast. As Trintech, a 12-year-old payment automation company in Ireland, began to evolve into an international Web business in the 1990s, Visa International invested in it through a strategic venture capital fund. Trintech won e-commerce-related Visa business in Europe and Latin America, and this year its PayGate NetAcquirer system was chosen for the Internet Payment Gateway system that Visa U.S.A. assembled for its membership.
Trintech, which centers its Internet activities in San Mateo, Calif., recently completed an initial public stock offering. On Tuesday it reported a 94% increase in third-quarter revenue, to $8 million, and a net loss of $2.1 million, down from $2.8 million. Its active software licensing helped boost the gross operating margin to 46% from 21%.
Trintech also announced Tuesday that NetIssuer would be combined with Verisign Inc.'s OnSite digital certificate management service for customers that want to add that extra layer of cardholder authentication when services are delivered virtually. Verisign, a successful 1998 IPO, also got financing from Visa in its early stages.
When Visa U.S.A. made its digital wallet announcement on Tuesday, countering MasterCard's with IBM, it said it was taking a multivendor approach. Cybercash Inc. and Brodia.com were the software vendors working with Visa's initial group of banks.
Trintech spokesman Richard Martin pointed out that it is not unusual for companies in Internet businesses to work with competitors. He said NetIssuer met MasterCard's needs to "flesh out its Internet offering," and Trintech's relationship with Visa is unaffected.
Mr. McGuire said the alliance with MasterCard "provides an excellent distribution channel" for NetIssuer "and a valuable opportunity to work with a leader in emerging technologies."
Mr. Kranzley said MasterCard institutions stand to benefit from "the reduced consumer distribution costs inherent in a server-based offering" as well as "the strong marketing proposition [of] the simple and easy-to-use digital representation of the issuer's card on the user's personal computer or Web appliance screen. We look forward to future Trintech releases, which will support members' efforts to build additional value into their customer and merchant relationships."