Undaunted by setbacks, and reaching deeper into their technological bags of tricks, MasterCard and Visa are trying new ways to get the United States onto the world smart card map.

The bank card associations revealed details last week of plans to push their smart card operating systems into a higher gear. Burned by a disappointing consumer trial on New York's Upper West Side in 1997 and 1998, MasterCard and Visa are both looking toward wholesale uses of their technologies that allow multiple services to coexist on one card.

Visa International is introducing its Open Platform system to the United States through a pilot with the government's General Services Administration, with Citibank issuing the smart cards. Though the 450-card trial has been the subject of much industry buzz in recent months, many details did not come to light until the Cardtech/Securtech conference last week.

Also at that meeting in Chicago, the biggest card technology event of the year, MasterCard announced a major initiative to move its competing Multos operating system into the corporate and government markets.

MasterCard and its smart card subsidiary, Mondex International, also made several other moves of domestic and foreign import, including the licensing of Mondex to two U.S. banks and the decision of Mycal Card Corp. of Japan to convert five million cards to the Multos operating system over three years. (See related article on page 14.)

With smart card promoters desperate for any sign that the United States might finally become hospitable to their programs, government-sponsored applications have been regarded as especially promising. Hopes are therefore riding high on Citibank and the General Services Administration, a project growing out of the federal government's recent revision in procurement of payment card services.

The GSA effort will also take its place among several high-profile introductions of the Visa Open Platform and the Java programming language that underlies it.

Starting this month, the cards will be given to employees at the agency's Willow Wood building in Fairfax, Va. Each of the Visa cards comes with a computer chip, a standard magnetic stripe, and the cardholder's photo on the back.

The card serves as a commercial charge card, provides authorized entry to secure building areas, tracks the movement of office equipment, and employs digital certificates and biometric identification to authenticate electronic mail and assure secure logons to personal computers.

GSA cardholders will be able to use smart card readers at 90 airports to automate check-ins on American Airlines flights. The cards also serve as telephone calling cards for business purposes.

The government has emerged as a smart card advocate, and the payment portions of multiple-application programs have given banks a chance to get their feet wet. Visa has been involved in chip programs at three military facilities: Fort Leonard Wood and Fort Benning, with cards issued by First Union Corp., and Lackland Air Force Base, with cards from Bank of America Corp.

"We think the government will be a real catalyst for change in this industry," said Diana P. Knox, senior vice president of smart card applications and market development at Visa U.S.A. in San Francisco. "The U.S. government seems to be one of the more aggressive 'industries' looking to partner with smart cards."

Ms. Knox said the government actions will influence private industry to adopt a compatible infrastructure.

"The federal government is one-third of the gross national product," she said, adding that it could be viewed as "the largest company in the world."

The Willow Wood pilot is scheduled to run for nine months. The GSA asked Citibank, the bank it chose over four other eligible bidders for government payment card services, to package several applications together in the Visa Open Platform framework.

The fact that Visa is working on this high-profile project with Citibank indicates that the organizations are on good terms despite a recent disagreement over branding policies that led Citigroup Inc. chairman John Reed and consumer banking chief Robert Lipp to leave the Visa board of directors.

For GSA, the Citigroup banking subsidiary drew on International Business Machines Corp.'s MFC operating system, Siemens 66 chips, 3-G International for systems integration, GTE Cybertrust for digital certificates, and the Sun Microsystems Java Card technology as adapted by Visa.

Identicator Technology, a division of Identix Inc. that also worked with First Union at Fort Leonard Wood, supplied fingerprinting hardware and software. PC keyboards with fingerprint scanners and smart card slots were supplied by Cherry Corp.

None of the principals disclosed how much money it is investing in the demonstration, which is being described as an attempt to foster technology leadership.

"We are trying to reinvent the government," said William O. Holcombe, director of the smart card team at the GSA's office of government policy. "We are looking at all this new technology and then we'll advise the government" on future moves.

The GSA effort is one of several initiatives with cards and other technologies such as digital signatures to modernize practices and make the government more efficient. G. Martin Wagner, the GSA's associate administrator for government policy, told a Cardtech/Securtech audience Tuesday that it intends to "learn lessons for governmentwide application."

He said the government cannot take entrepreneurial risks like a private- sector organization, but instead follows "a doctrine of affordable mistakes-a little less risk-averse" than government traditionally was, "but what we can afford."

The government prefers to lean on private-sector suppliers, rather than doing its own development work.

Mr. Holcombe said the ability to mix and match applications on smart cards is a key to their success. He said the GSA chose the Java technology in part because it allows for loading and deleting of programs without having to replace the cards.

"You can't make a business case for only opening the door with a smart card," Mr. Holcombe said.

Ms. Knox said the GSA pilot's significance goes well beyond its small number of cards because of the promise of the Open Platform.

"There have been some inefficiencies in multi-application cards that the industry is trying to work out," Ms. Knox said.

One question Visa is hoping to answer with the GSA trial is how customer service will be handled with bank and nonbank applications coexisting on cards.

"If you can't get into the building, who will you call?" Ms. Knox asked. "There will be a lot of learning."

LONDON-The University of Exeter, one of several educational institutions around the world using Mondex smart cards, is planning to use the electronic cash technology in its distance learning program.

A pilot of "pay as you go" distance learning is being developed for next fall. Students will be able to pay for courses on-line through smart card readers on personal computers. Longer term, on-line merchants will be able to accept student payments the same way.

"This system has the ability to revolutionize distance learning," said Laurie Burbridge, director of information technology services at the University of Exeter. "We will be able to deliver information cost- effectively to any student in the world and allow them to pay fees in any way they wish, including by very small amounts" and in multiple currencies.

The university developed the distance learning software and recently demonstrated it with a transaction valued at under $5 between the United Kingdom and New Zealand.

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