San Jose, CA, USA, OTI, Cupertino, CA, USA, December 10, 2003–Atmel Corporation (Nasdaq: ATML) and On Track Innovations Ltd (OTI) (NASDAQ: OTIV; Prime Standard (Frankfurt): OT5) today announced that their contactless secure microcontroller solution has been selected by MasterCard International for use in its MasterCard PayPass™ deployments in the U.S.

MasterCard PayPass™ is a new “contactless” payment program that provides consumers with The Simpler Way to Pay™. Using MasterCard PayPass™ , consumers simply tap or wave their payment card on a specially equipped merchant terminal, eliminating the need to swipe a card through a reader. The new solution is ideal for quick payment environments where speed is essential, such as quick serve restaurants, gas stations, drug stores, supermarkets and movie theatres.

MasterCard PayPass™ functions using a secure contactless microprocessor chip and an antenna. Atmel has been selected to supply the secure contactless microcontroller and has partnered with OTI to provide the contactless solution expertise including the operating system, application support and inlay technology.

The contactless chip used is an 8-bit secure microcontroller from Atmel’s AT05SC highly secure product family, currently used for a variety of banking applications. The chip features 40KB ROM, 2KB EEPROM, hardware DES and hosts Atmel’s high security mechanisms. The contactless chip is compliant with lSO-14443B and ISO-7816 industry standards. Atmel and OTI provide the small, robust chip in both a contactless module form and in an inlay form, providing easy card embedding for card suppliers.

Jeff Katz, Atmel’s Vice President of Marketing commented, “We are excited to be a part of MasterCard’s PayPass™ program, which may well act as the driver for the introduction of contactless payment solutions into the U.S. payment industry, due to its ease of implementation and compatibility with existing infrastructures.”

“OTI has worked with MasterCard on its PayPass program since its inception. OTI has successfully integrated our inlay technology with leading U.S. card vendors and have integrated our reader solutions with multiple point of sale providers to support MasterCard PayPass™, said Ohad Bashan, President & CEO of OTI America and Head of Global Marketing at OTI. “Now, by partnering with an industry leader like Atmel, OTI is able to provide its customers with an even wider range of contactless card technology.”

Murdo Munro, Vice President, Mobile & Wireless at MasterCard International commented “OTI have provided MasterCard with support and innovative products throughout the development phase of PayPass. This partnership with Atmel will provide our PayPass issuing members with a robust solution for mass deployment”.