If any doubts remained about Visa's smart card strategy, the association began to quell them this week with the formation of a multinational Open Platform Users Group, five major U.S. banks among them.

The lead banks of BankAmerica Corp., Citicorp, First Union Corp., NationsBank Corp., and U.S. Bancorp joined about 20 other charter members, many of them previously involved in Visa smart card implementations.

One participant, Standard Chartered Bank of London, on Wednesday in Singapore kicked off this new technological phase with the first live demonstration of a smart card with an operating system based on the Visa- endorsed Java programming language.

"We always get asked if this technology is real," said Diana Knox, Visa U.S.A.'s senior vice president of chip technology. "This demonstrates that it is."

Visa International and its supporters view the user group as a sign of new momentum for Visa's technical specification and for the Sun Microsystems Inc. Java philosophy of cross-system compatibility and "on the fly" upgrading of software.

But Ms. Knox said the flexibility built into the Standard Chartered demonstration holds particular relevance for the United States.

"We think the future for smart cards here is in multiple applications" as opposed to simple stored-value cash replacement, Ms. Knox said in an interview during the American Banker Future Money conference.

The Standard Chartered cards, made by Gemplus of France, combine payment, loyalty, and digital certificate functions, enabling both conventional retail and Internet transactions. They are to be commercially available in the third quarter, Visa said, which could prod similar advances around the world.

Visa International president Edmund Jensen said the Visa Open Platform card, a year in the making, "dramatically changes how we think about and use money. For the first time, we are providing real, easy access to an endless array of information and payment services to consumers worldwide."

Ms. Knox said U.S. testing would take place over the next year, leading to market availability in late 1999.

She and another smart card advocate who spoke on Thursday's Future Money program, Mondex USA president Janet Crane, found themselves answering concerns about domestic smart card acceptance.

Octavio Marenzi, research director of Meridien Research in Boston, said the United States accounts for only 300,000 of the 200 million smart cards in use in the financial services industry worldwide. He said Europe is approaching the point where "the magnetic stripe card will begin to look like a quaint anachronism."

Mr. Marenzi said he did not expect the U.S. market to catch up, particularly because of industry fragmentation and lack of cooperation. He said it could fall 10 to 12 years behind the more advanced countries.

Ms. Crane, enthusiastically detailing the Mondex-Burger King cash card and loyalty experiment launched this week in Long Island, N.Y., said it is one more example of how the technology is ready and how a sophisticated marketing organization can find a "value proposition."

"The leaders in this industry are launching," she said. "The train is pulling out of the station. Do you have a seat?"

Ms. Knox said she is increasingly optimistic about U.S. prospects, in part because of growing cooperation within and across industries on technical standards. The Open Platform group is one example. She said one of its messages is that "we don't believe the issue is operating systems any more. The issue is the interface, and with the right interface we can use any operating system."

Visa, with its Java approach, still appears at loggerheads with Mondex and its Multos operating system. But people on both sides say they agree in principle on the need for a common platform, and Multos is capable of supporting Java.

"It's a question of how we get there," said Wells Fargo Bank executive vice president and Mondex USA chairman Dudley Nigg. "I am committed to helping everyone get to that common platform." Then, he said, competition can be centered where it belongs: on brands, applications, and partnering.

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