Visa International's regional organization for Central and Eastern Europe, the Middle East, and Africa-known as CEMEA-has adopted a six-year timetable for full conversion to smart cards.

The plan is similar to one adopted in October by Visa EU, the European Union organization, with which CEMEA shares headquarters in London. All new payment terminals are to be chip-compatible by January 2001, and all cards are to be converted by 2005.

The announcement helps underscore Visa's commitment to a "migration path" for smart cards, which are far more established in Europe and Asia than in North America.

CEMEA may be aided by the fact that its countries tend to be developing modern payment systems, providing a clean slate for the introduction of advanced technologies.

Visa pointed out that smart card programs are under way throughout Europe. Chip cards are already standard in France, and major card issuers in the United Kingdom are on a two-year conversion schedule.

The CEMEA decision coincided with news from Poland, where 11 Visa banks plan to issue 20,000 smart debit and credit cards, and from Slovakia, where Slovenska Sporitelna is testing smart debit and credit. "The approval of this migration plan by our board, coupled with the introduction of smart cards in Slovakia and Poland, represent a big step in (CEMEA's) move toward smart cards," said the regional president, Anne Cobb.

Visa said it has more than 70 smart card programs in 33 countries and on the Internet, with 23 million cards, including eight million of the Visa Cash variety.

u

Smart cards are alleviating a cash shortage in the Russian city of Neftekamsk, according the Fujitsu Ltd. subsidiary ICL, supplier of the SmartCity system. SAN Trading Co., known as STC, installed a settlement card system from ICL that enables factories to sell goods and pay employees without any money physically changing hands.

The multiple-application smart card system provides a solution to the shortage of official ruble notes. An inability to complete many payments led to extensive bartering arrangements and caused declines in consumer purchases.

An initial 4,000 participants in the system were able to receive and pay electronic cash. ICL said the equivalent of $65,000 has been transferred onto employee smart cards so far. STC recently ordered 6,000 more cards, saying the number could grow to 70,000.

"We have been amazed at the response and rate of uptake," ICL smart card business director Philip Eames said. The way SmartCity has aided the local economy "demonstrates the potential for smart cards to be a real alternative to cash," he said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.