MIAMI -- A new technology designed to combat credit and debit card counterfeiting has been dropped from consideration by Visa and MasterCard, card association officials said.

The technology, called "jitter," had been one of a handful of security systems evaluated by MasterCard International and Visa USA for possible use within the next few years to stop counterfeiting, an area of growing losses for card issuers.

No Two the Same

The jitter system being promoted by Miami-based Xtec Inc. operates on the principle that, like snowflakes, no two credit or debit cards are alike.

Jitter refers to the differences that come from subtle variations in the magnetic properties of the cards.

Xtec's security technology enables point of sale terminals to measure these variations and recognize if the information encoded on a credit or debit card's magnetic stripe belongs with that card or has been copied onto a counterfeit card.

While no final decision has yet been made on what, if any, technology to embrace, jitter was ruled out recently by both Visa and MasterCard, said Jana Weatherbee, a MasterCard spokeswoman in New York.

"Our research shows that it isn't ready for the marketplace yet," Ms. Weatherbee said.

Visa too thinks that jitter technology is "not mature enough to go out to market," said spokesman Albert Coscia.

The technologies that remain in contention include so-called watermarking, smart cards, and specialized types of bar coding and holograms, Ms. Weatherbee added.

Speaking by telephone from the floor of an industry conference in Philadelphia, Xtec's chief executive, Denise Jeffreys, acknowledged that the card associations had expressed some concern that the jitter technology was not in commercial use.

But Ms. Jeffreys said she was not aware that jitter had been dropped from consideration by the car associations for the next round of card security enhancements.

Not Dissuaded

She added, however, that she plans to continue lobbying for adoption of the technology, which she believes is the most effective and least expensive way to stop credit and debit card counterfeiters.

"The other technologies they are looking at, including smart cards, are really quite fallible," she said.

"Whatever they may be saying now, I'm quite sure we can get them to change their minds."

Concrete Example

Part of this lobbying campaign entails an unusual way of demonstrating the need for its security system - by actually counterfeiting cards in meetings with bank card executives and at trade shows.

To do this, Xtec representatives swipe bankers' credit and debit cards through customized terminals that read and record the information stored on the cards' magnetic stripes.

Company officials use this information to make counterfeit cards that could be used at stores and at automatic teller machines or point of sale debit terminals, since the electronic "skimming" has put Xtec officials in possession of the cardholders' personal identification numbers.

Respected for Credentials

Ms. Jeffreys said that Xtec has never actually used the counterfeit cards to commit a fraud.

But her demonstration carries weight. As a former consultant to MasterCard for Arthur D. Little with a doctorate in electrical engineering and computer science from Manchester University in England, Ms. Jeffreys is respected in credit card circles.

Partly stirred by personal experience with Ms. Jeffreys' demonstration, some bank technology executives are arguing that personal identification number security systems need to be improved.

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