Underscoring its intention to be a force in interactive home services, Visa International has agreed to collaborate with Philips Home Services on a wide range of electronic commerce projects.

Massachusetts-based Philips, a unit of giant Philips Electronics N.V. in the Netherlands, is best known to bankers as the maker of screen phones used in Citicorp's home banking program.

The new partnership will most certainly lead to a Visa application for the Philips enhanced phones.

But officials from both companies maintain that the alliance also can be a laboratory for other home banking innovations, including the establishment of communications standards and the promotion of home banking on an international scale.

"Philips' technical know-how and international presence make them a natural partner for Visa," said Brent Robinson, senior vice president of Visa Interactive, which is the card association's home banking division.

Visa Interactive already provides to its member financial institutions remote banking services through a variety of devices, including touch-tone phones and screen phones from U.S. Order, and will soon do so via personal computers.

These services have enticed over 50 financial institutions to sign on with Visa Interactive. That compares favorably with the 20 institutions committed to MasterCard's MasterBanking programs.

However, Visa officials say the addition of the Philips' screen phone will attract attention from institutions interested in applications for smart cards, which are powerful payment cards that feature a computer chip.

The Philips screen phone, known as the P100, has a slot into which a smart card can be inserted.

In addition, since smart cards are already widely used in many foreign countries, Visa sees the P100 as a good starting point for establishing home banking relationships with overseas banks.

Bolstering this effort is the fact the Philips device is certified in 23 countries, Mr. Robinson said.

Visa also believes the Philips alliance will help to establish communications standards for a range of home banking applications.

Philips is already engaged in developing an international standard for interactive financial services with several banking and technology vendor partners.

Gerrit Schipper, president and CEO of Philips Home Services, said the agreement fits his company's strategy to partner with leading global companies to further the market for interactive financial services.

He said advanced capabilities of screen phones - such as caller ID, call waiting, and information services like electronic telephone books - make it easier for banks to sell phone-based financial services to their customers.

"Banking is not a killer application, but it is an anchor service," said Mr. Schipper. "It's crucial that banks buy into this because we need a way to move money around the network."

A test of Visa applications for Philips P100 screen phone will take place later this year, and two additional pilots are slated for the first quarter of next year. The names of the financial institutions testing the applications have not been disclosed.

Beyond the deal with Visa, Philips is pursuing bank relationships on its own. Philips executives said two banks will begin offering proprietary home banking services through their phones in the fall.

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