Mastercard Launches Secure Payments On Web

New Yorkers Stick to Cash

Latest Developments from the E-Cash Frontline

While there’s theoretical progress being made to digitize the money supply, once again we find resistance to change. We present these two recent developments:

Mastercard Launches Secure Payments On Web

Stealing a march on Visa, which has always considered Europe to be its turf, MasterCard has announced the successful pilot transmission of the first secure payments across the Internet in Europe.

The project, the first of its type in the world, was undertaken earlier this month when issuers of Danish and French Eurocards, the European name for MasterCard, routed secure transactions with the cooperation of Europay International, the main processor in Europe of Eurocard and MasterCard transactions.

The first transactions were processed at the end of December using a Danish MasterCard-Eurocard card and the new Secure Electronic Transaction (SET) protocol. Carl Aegidius, IBM’s Nordic director, was the first person in the world to complete a transaction with the level of security made possible by using the SET standard for safe online transactions. The first transaction took place on December 30 last year.

According to Europay, that transaction set the scene for a pilot project beginning this month, involving three retailers and up to 1,000 PBS MasterCard-Eurocard cardholders, and opens up the unprecedented market potential for what officials describe as "a fast developing, attractive area of business."

According to MasterCard, over the next six months, plans call for similar projects to go live in other parts of the world, enabling Danish Internet users and businesses to participate in cross-border electronic commerce.

The SET standard, developed and proposed as a global standard in late 1996 by a consortium of payment systems and technology providers, is billed as introducing the use of digital certificates which validate cardholders and businesses.

The French breakthrough, meanwhile, came from Europay France, the association representing Europay Member banks in France. It announced the launch of a pilot project involving thousands of French Eurocard-MasterCard chip cards, which for the first time will be able to make fully secure payments over the Internet using chip technology.

The French project, beginning in April 1997, is being implemented in close cooperation with Credit Agricole, Credit Mutuel, Banques Populaires, La Poste and Europay International.

Security will be assured by combining three key elements: existing chips already embedded in French bank cards (currently 25 million); secured chip card readers connected to PCs which cardholders will receive from their banks; and the use of security architectural standards defined by GIE Cartes Bancaires’ Chip-Secure Electronic Transaction (C-SET).

By storing sensitive data in the chip card and not in the PC, C-SET claims to offer a high degree of security and at the same time provides guaranteed payment to retailers and businesses. Further details of the French pilot can be found at http://www.eurocardmastercard.tm.fr.

It was one of those ideas that looked better on paper. After a five-year trial run, Nynex is removing its bright yellow Change Card pay phones, which only accept a special, prepaid telephone card, from the streets of Manhattan. The Change Card phones are being replaced with an upgraded, state-of-the-art version of the traditional, coin-operated pay phone.

"Although we conducted a variety of marketing and advertising campaigns to inform the public about the Nynex Change Card phones and to encourage their use, these phones just never caught on with our customers," Brian Price said, director of marketing and sales for Nynex’ Public Communications Division.

"New Yorkers are used to carrying coins with them for parking meters, the laundromat, and bus fare," he said, "and we learned that, when it comes to making a local call from a Nynex pay phone, people prefer to use coins rather than the specialized Change Card product, which only worked on the special yellow phones."

Nynex is replacing the Change Card phones that are on city sidewalks with a new type of coin-operated phone that looks and works like the traditional, coin-operated phone but is much more technologically advanced, Prince said.

Nynex will provide full refunds to consumers who have the Nynex Change Cards.

(Contact: Gilliane Palmer, Europay +32-2-352-5647; Fax +32-2-352- 5732; E-mail: press@europay.com; Steve Marcus, Nynex, 212-395-0500)

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