Financial Institutions Working With MasterCard to Manage More than 400 Chip Implementations–Double Last Year’s

Purchase, NY, November 18, 2003–Registering a sharp rise in global demand for smart card services, MasterCard International today announced that it is now working with its customers on more than 400 individual chip implementations around the world. This figure represents more than double the number of projects active in the fourth quarter of 2002.

Smart card adoption continues to gather force in most regions of the world. Smart card activity has been particularly strong in the Asia/Pacific region, where the number of EMV smart cards has continued to double each year–to 14.5 million cards today. The same basic trend holds true in Latin America/Caribbean, South Asia and Middle East Africa and especially Europe, which continues to lead the world with more than 200 chip migration programs now underway.

This widespread technology shift has helped to guide recent decisions by MasterCard’s regional boards in Asia/Pacific, Europe, Latin America/Caribbean, and South Asia and Middle East Africa, who have all recently enacted intra-regional liability shift policies calling for the full-scale adoption of smart cards and chip terminals in the 2005 and 2006 time period. Migration incentives are already in place in most of these regions as well.

“MasterCard and its customers are launching some of the most exciting and innovative smart card programs in the payments industry,” said Dr. Toni Merschen, senior vice president and head of MasterCard’s Chip Center of Excellence. “By staying close to our customers, and providing the right technology solutions at the right time in the right markets, MasterCard is making the move to chip as smooth as possible.”

One of MasterCard’s key European customers, Crédit Mutuel Centre-Est Europe, will be the first bank in the world to issue M/Chip 4 on MULTOS in a massive, country-wide roll out beginning in early 2004. M/Chip 4 on MULTOS is the first EMV payment application to receive EAL4+ certification, the highest Common Criteria certification accepted worldwide.

“Crédit Mutuel Centre-Est Europe is pleased to be upgrading at least half of its entire card portfolio with chips carrying M/Chip 4,” said Claude Brun, executive director at Crédit Mutuel. “We have selected MasterCard’s M/Chip 4 application based on our need to get to market quickly, our need for flexibility and our desire to offer our cardholders the highest security available.”

To help ensure a steady stream of MasterCard chip products in the marketplace, MasterCard is working to equip the vendor community with the tools they need to support MasterCard smart card programs around the world. Card vendors including Austria Card, Gemplus, Giesecke & Devrient and Setec have committed to supporting M/Chip 4. MasterCard has also recently signed an agreement with Ingenico, making Ingenico a key supporter of MasterCard’s M/Chip deployment program.

Global Support Programs

Last year, MasterCard announced OneSMART MasterCard, a comprehensive, global support program covering every aspect necessary to successfully launch smart cards. With OneSMART MasterCard, all of MasterCard’s global smart card solutions, technical expertise, and marketing support were consolidated under a single banner.

Expanding on this, MasterCard is today unveiling a subset of OneSMART MasterCard, called the “M/Chip Deployment Program,” which provides a complete solution for MasterCard’s customers who are migrating their payment cards from the magnetic stripe platform to chip. The M/Chip Deployment Program focuses specifically on addressing all aspects of chip migration and consists of three components:

The M/Chip application and its enabling infrastructure
M/Chip Implementation Support Services provided by MasterCard Industry products and services based on the M/Chip specification

OneSMART Choice for Migration

To further enhance their smart card business case, MasterCard’s customers can leverage MasterCard M/Chip 4 as the technical basis to deliver a range of additional applications, including:

• M/Chip Pre-Authorized – Allows the cardholder to place an amount of cash in a “pre-authorized” account, which is regulated by the chip’s “open-to-buy” counter. The cardholder continues to use the card in an off-line mode until the amount requested exceeds the card’s “open-to-buy” counter, at which point funds must be replenished. This new application extends the Maestro value proposition by enabling debit cards to be issued to new customer segments and accepted by new merchant categories.

• Chip Authentication Program – M/Chip 4 cards can be used in conjunction with MasterCard® SecureCode™ to generate the authentication data necessary to guarantee e-commerce transactions. This program, called the Chip Authentication Program, is a smart card based authentication solution that MasterCard is making available to its issuers as part of its global MasterCard SecureCode solution. It can also be used for Internet banking and other applications requiring positive cardholder authorization. Three significant Chip Authentication Program implementations were announced this week by Barclaycard in the United Kingdom, Bundesverband der Deutschen Volksbanken und Raiffeisenbanken in Germany and Redecard in Brazil.

• MasterCard PayPass™ – M/Chip 4 also supports emerging solutions such as PayPass, MasterCard’s contactless payment program. As M/Chip is a highly flexible solution that can be customized to meet the issuers needs, it can be offered with the PayPass contactless capability either on a single, integrated chip, or as a “hybrid,” two-chip (contact and contactless) card. Either way, PayPass enables cardholders to pay with one simple touch of the card.

  “By building on M/Chip 4, we are greatly boosting the value proposition for chip migration,” said Merschen. “When our customers adopt M/Chip, they receive immediate access to a range of applications and related support services that can strengthen their business case for moving to chip.”

  The OneSMART MasterCard program was recently expanded with a range of pre-configured smart card packages that will help our customers get to market faster. These three distinct packages all include MasterCard M/Chip and range in functionality from a basic, single application payment card to a more robust, Web-savvy card optimized for Internet usage:

• OneSMART MasterCard Payment – provides an enhanced payment application OneSMART MasterCard Authentication – ensures a higher level of security for online shopping and remote banking OneSMART MasterCard Web – allows cardholders to securely store and manage a wide range of personal data (such as names, addresses, URLs, log-on passwords) on the smart card chip

About MasterCard International

MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members’ credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard International manages a family of well-known, widely accepted payment cards brands including MasterCard®, Maestro® and Cirrus® and serves financial institutions, consumers and businesses in over 210 countries and territories. The MasterCard award-winning Priceless® advertising campaign is now seen in 98 countries and in 46 languages, giving the MasterCard brand a truly global reach and scope. For more information go to http://www.mastercardinternational.com.