MasterCard Announces New Platform Features and Functionality That Revolutionize Payment Processing

Business Wire, April 18, 2001

Business Editors

ST. LOUIS--(BUSINESS WIRE)--April 18, 2001

First integrated global payment-processing platform reduces

international processing barriers, delivers unlimited

capacity, unmatched global reach, and local customization

MasterCard International today announced the deployment of a revolutionary new payment-processing platform that frees member financial institutions to leverage technology in support of their specific business needs. The comprehensive platform delivers unprecedented levels of flexibility and enables mass customization of payment processing.

"With MasterCard, members are not held captive by a card association's technology," said Rob Reeg, MasterCard senior vice president, Systems Development. "With the new platform, members now have the flexibility to customize processing to their business, allowing them to take advantage of many new opportunities, both locally and globally."

"We have completed the most sweeping technological change in MasterCard history by developing the first integrated, global payment-processing platform," said Jerry McElhatton, MasterCard Global Technology and Operations Senior Executive Vice President. "The days of `one size fits all' are over. With the new platform, our members' business goals drive the technology, instead of technology driving their business decisions."

MasterCard's Multi-Year Processing Strategy

MasterCard has initiated a three-step strategy for delivery of its new core processing platform. These steps include:

-- A massive, world-wide upgrade of Banknet, MasterCard's global network, to
the industry's first virtual private network (VPN);

-- Development of new customizable features and functionality through
proprietary modular software, focused on the introduction of a new clearing
system;

-- Distribution of network processing to Regional Service Centers, enabling
customized local processing.

New Functionality Gives Members Control Over Data

MasterCard is rolling out its new Global Clearing Management System (GCMS), the replacement for its previous clearing system, INET, with members and processors. GCMS captures more information than ever during clearing, gives members more control over how the data is handled and links authorization and clearing messages. Thirty-three members already have committed to early migration to the new clearing platform.

The platform sets the stage for members to participate in new business opportunities - both globally and locally - and efficiently links members to emerging payment channels, such as Internet and wireless applications.

Global Impact

A key benefit of the new platform is that international transaction processing can be customized to local markets. This has major business implications for financial institutions throughout the world, especially those with global operations. Through MasterCard's technology, members may move into new markets quickly, as technological barriers to growth are removed.

"The new platform will help our members break through international processing barriers that previously created expensive business challenges and even prevented entry into some markets," said Reeg. "We're more than midway through this strategy, and our members tell us the MasterCard platform will change the way they do business."

Members will be able to dictate daily settlement times based on what makes business sense for them, factoring in local holidays and time zones instead of conforming to the U.S. clock and calendar. Also, members can determine which currency they will settle in rather than being forced to convert to U.S. dollars. Finally, the new platform provides support for local data practices, local processing and local fees. The new platform will recognize a member as a single entity, whether it operates in one or multiple countries. This means member portfolios can be consolidated, even though they may be settled in varying currencies.

MasterCard's Regional Service Centers help members operate within local guidelines. For example, they'll make it possible to process transactions completely within a country like Taiwan, as dictated by the country's laws.

Operating Efficiencies

Members will experience increased operating efficiency, in daily activities and specific circumstances, such as partial portfolio sales. They will see transaction-routing enhancements and elimination of batching transactions. The new applications provide flexibility, allowing members to focus their internal technology on features relevant to their business.

The new applications also will help members better manage customer account performance. Technical details like easier transaction reversals translate into savings for issuers, who will have fewer inquiries and chargebacks to manage as incorrect charges can be resolved before posting to a cardholder's bill.

Real-time, online access to transactional data will help issuers and acquirers resolve cardholder and merchant inquiries immediately, often in a single phone call, as opposed to time-consuming, labor-intensive research that can drag on for weeks. An additional benefit is fewer resources need to be committed to research and data storage.