A key witness in the Department of Justice's antitrust case against Visa and MasterCard testified on Wednesday that the credit card associations deliberately held back smart card technology so that one association would not come out with a product before the other.

John Elliott, a former MasterCard executive who left the New York-based card company in March 1989, and an important witness for the government, said Visa's and MasterCard's member banks in the mid-1980s wanted the card companies to introduce smart cards in tandem. At that time MasterCard was further along in its development of these chip-based cards, Mr. Elliott said, and put the brakes on its initiatives primarily because Visa was not yet ready to come out with its own product.

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