VISA: Electronic purse schemes spearhead common standard

M2 PRESSWIRE-23 June 1998-VISA: Electronic purse schemes spearhead common standard (C)1994-98 M2 COMMUNICATIONS LTD

RDATE:220698

-- German and Spanish electronic purse schemes join with Visa to create first truly international electronic purse standard

SAN FRANCISCO -- Visa International today announced that common global specifications for the electronic purse (stored value) will be published later this year, paving the way for world-wide interoperability of electronic purse schemes.

Joining Visa in making today's announcement were two of the world's largest operators of domestic electronic purse programs - the ZKA in Germany and SERMEPA in Spain. The three partners together account for the majority of the world's electronic purse cards and have a strong presence in the majority of the countries where electronic purses are currently used.

The agreement between ZKA (Zentraler Kredit Ausschuss, which represents the German banking industry and operates the Geldkarte scheme), SERMEPA (the technology subsidiary of Visa Espana, which represents over 150 financial organizations and operates the world's largest Visa Cash program), and Visa International, will mean that the 50 million electronic purse cards issued by the various members of the three associations will become interoperable. This effort has been the result of a task force integrated by Visa International, ZKA and SERMEPA over a one year period.

To date, most electronic purse schemes have been national systems with no international utility. Visa has been pushing for common specifications for some time and had publicly committed to working with other schemes to broker a standard. Today's announcement is a major breakthrough to establish a truly international electronic purse standard.

Commitments to adopt the new common specifications, once they are published, have also been received from the Italian electronic purse operator, SSB, and the national payment organization in Sweden.

Existing Visa Cash schemes in 17 countries around the world and over the Internet, including five programs in Latin America which use technology developed by SERMEPA, will be able to migrate to the common specifications. There are currently over eight million Visa Cash cards world-wide. The electronic purse schemes operated by the ZKA, SERMEPA and Visa International, account for more than half of the world's total electronic purse cards.

The move is particularly significant for Europe, where the 1999 introduction of a common currency - the euro - has created added impetus for a suitable cross border electronic purse solution. In the future, the new standard will allow cardholders to make purchases with electronic purses in euros when travelling around Europe. It is also crucial for the use of electronic purse cards over the Internet, since cardholders will be able to conduct international transactions without having to leave their homes.

The global electronic purse specifications, available later this year, will make use of public key technology and ensure that each electronic purse is capable of holding multiple currencies. Cardholders will be able to store their home country's currency, the euro and any other foreign currencies all on one card.

Edmund P. Jensen, president and CEO of Visa International, said, "Europe has led the way in the development of the electronic purse so it is entirely appropriate that common standards should have been forged by Visa International and the major European schemes. These joint efforts will provide a significant boost for the growth of the electronic purse, not just in Europe but world-wide. It means that one common system will be adopted by Visa Cash and the other brands. It will enable cardholders to use their cards internationally, and it will stimulate an explosion in the number and range of different devices which can accept the electronic purse. This is good for consumers, retailers and banks."

Hans van der Velde, president of Visa European Union region, said, "For Europe, this is essential. The arrival of the euro means we have to have a system which cuts across borders and offers the same convenience and flexibility for consumers as a single currency. Our work with the ZKA and SERMEPA means that we are building a truly international card payment infrastructure based on powerful chip technology. This will protect our members' investments and interests, contrary to the strategies of other global players. I believe this is the foundation on which all card payment systems will operate and is a major step towards the future."

According to Manfred Kruger, chairman of the ZKA chip working group, "With interoperability now guaranteed, it seems that we can be certain of future growth. The development of these specifications will ensure that the investments which have been made to date will be leveraged and the smart card industry as a whole will receive a significant boost."

Jose Manuel Gabeiras, managing director of Visa Espana, said, "There has been a proliferation of electronic purse programs over the past six years and now, with the experience gained, it has become necessary to migrate to common specifications and realize the associated benefits, such as reduced infrastructure, development and implementation costs."

The electronic purse, or stored value card, is widely seen as an important application for chip-based payment cards. Numerous other applications, such as credit/debit and storing loyalty points or cardholder information, can also be added to provide true multifunction smart cards.

As the world's best way to pay, Visa is the preferred payment brand and the largest consumer payment system world-wide with more volume than all other payment cards combined. It plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions, their cardholders and the global economy. As the leader in emerging technologies, Visa has more then 70 smart card programs in 31 countries and on the Internet, with 22 million Visa chip cards, including over eight million Visa Cash cards. Visa is pioneering SET Secure Electronic Transaction programs to enable and advance Internet commerce. Visa's 642 million cards, generating over US$1 trillion in annual volume, are accepted at over 15 million world-wide locations, including 400,000 ATMs in the Visa Global ATM Network.

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