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EDS joins Visa on smart cards

The big systems integrator has signed up to support the Visa Smart initiative from Visa International.

EDS will work with financial institutions to implement smart card applications including debit and credit cards, electronic cash, and loyalty programs. The big systems integrator has signed up to support the Visa Smart initiative from Visa International.

Both Visa and MasterCard want to move from cards with a magnetic stripe on the back to a smart card or chip card, which has an embedded microprocessor and can store more data or other applications.

But the Justice Department thinks the card giants aren't moving fast enough. Last month Justice filed an antitrust lawsuit against both Visa and MasterCard over their control of banking networks, mentioning specifically the slow progress on smart cards in the United States. Both networks are owned by the same member banks.

Visa's program competes with Mondex, an incompatible smart-card program from MasterCard, as well as with Proton smart card scheme, active mainly in Europe.

The alliance marks EDS' formal entry into the smart-card arena as part of its e-commerce consulting practice. EDS has worked in London on a chip-based mass transit program and has other smart card infrastructure activity in Australia.

"What's significant is that Visa is making an effort to be more helpful to its bank membership by offering a total solution package," said Cathy Allen, CEO of Banking Industry Technology Secretariat (BITS), a unit of the Bankers Roundtable.

"Part of the Visa Smart program is not only to educate senior executives to see what applications to invest in, but to pull together appropriate vendors," Allen added, noting that consulting firms like Unisys, IBM, and Perot Systems also have smart card integration practices.

Card manufacturers like Gemplus and Schlumberger also do systems integration work because most companies want an end-to-end system, not just cards. IBM and The Sema Group are two other systems integrators in the Visa program.

Even so, banks are hoping for a convergence in the e-cash schemes pushed by Visa and Mondex, and other players. BITS, Smart Card Forum, and the European Committee on Banking Standards are trying to fashion an electronic cash system that would make e-cash schemes interoperable.

Visa predicts that smart cards will comprise a third of its card volume by the year 2002.