IC card spec readied for industry scrutiny

Electronic News, Nov 14, 1994

New York - Europay International, MasterCard International and Visa International last week said they are making available to industry their three-part specification on IC cards for payment systems which they envision installing on a global basis (EN, June 27, July 25).

The IC card developments last week also involved Visa lining up Microsoft to work on electronic bankcard transaction security and signing agreements for development of prototype chip cards and terminals with 20 technology suppliers.

The three payment organizations jointly disclosed Parts I and II of the spec earlier this year on electrical/mechanical characteristics and chip card/merchant point of transaction (POT) terminal interaction, respectively. The recently-finished Part III of the spec outlines transaction processing by chip cards and the POT terminals. It addresses terminal interaction to determine how chip-reading terminals will process selected card applications; transaction flow to define how terminals will handle the financial transaction to complete the payment process; and "exception handling" to define procedures that help ensure service availability in case normal processing is not possible.

Parts I and II of the IC card spec provided previously to member financial institutions and other related global organizations have been revised and are being reissued with Part III. Over the next several months, the card payment organizations membership and manufacturers are expected to be contacted and solicited for comments on the three-part set. The three payment groups said comments from members and industry experts will be considered for future

Meanwhile, Via and Microsoft said their letter of intent is designed "to jointly provide a standard, convenient and secure method for executing electronic bankcard transactions across global public and private networks. "The technology will consist of software supporting both cardholder and merchant sides of a transaction, plus work with the VisaNet payment system.

Microsoft and Visa said they will specs to make the secure transaction technology available to other software vendors and card system to implement themselves or license from Microsoft. The technology will be developed initially for Microsoft's Windows operating system family and is scheduled to be available in 1995. It will include extensive encryption capabilities based on RSA Data Security, Inc.

Visa also said its agreements on the 20 companies which are among the suppliers to the payments industry. "Visa is moving off the drawing board with the development of prototype equipment. This allows us to validate the specifications and perform internal testing that is critical to the implementation of chip technology," said William L. Chenevich, group executive VP at Visa.

The company said prototype development would take place in two stages, the first being an alpha stage with Gemplus, Schlumberger and VeriFone, and the second expanding development to the remaining 17 other vendor partners for manufacturing and beta testing of cards, terminals, automated teller machines, and personalization devices. "In addition to payment functionality, the chip will enable non-payment functions as well," Visa said. "The role of the chip in information storage and exchange sets the stage for tailoring payment and information services to the individual consumer as a market of one."

In addition to development and testing of prototype equipment, Visa expects to complete necessary chip processing modifications to its VisaNet systems by 4Q of 1996.

Besides Gemplus, Schlumberger and VeriFone, Visa's list of development partners includes AT&T Global Information Solutions, Bull, DataCard, Dassault, De La Rue Card Technology, a Rue Fortronic, Hypercom, IBM, ICL Payment Security, Diebold, International Verifact, NBS Technologies, Omron, Philips TRT, Racal-Transcom, Ltd., Security Card Systems and Toshiba.

Finally, MasterCard also reveaed that it has formed a new "Point-of-Interaction" (POI) group responsible for ensuring that transaction speed, reliability and security are optimized via the IC payment cards.