MBNA is Testing Microchip-Based Visa Cards at its Corporate Headquarters
WILMINGTON, Del., July 6 /PRNewswire/ -- Visa U.S.A., MBNA America Bank, N.A., and De La Rue Card Systems have begun to test a multi-function smart card, providing a "snapshot" of how microchip-based bankcards for consumers are likely to take hold in the United States. The program is the nation's first to combine credit, stored value and loyalty functions on a single smart card.
The Visa smart card, to be issued by MBNA, the largest independent credit card lender in the world, will place the functions of several traditional bankcards onto a single microchip, giving consumers access to two payment products -- Visa Smart Credit and Visa Cash stored value or "e-cash" with public key encryption for secure transactions. The new card will also contain a loyalty application that enables cardholders to accrue frequent-shopper points and redeem them for rewards with designated merchants at MBNA's corporate headquarters.
The cards will feature advanced microprocessors developed by De La Rue, known for its high-end, multi-function chip cards. The first public key application of Visa Cash in the United States, the cards have a feature-rich loyalty function allowing up to nine different reward programs. The rewards and award thresholds of the loyalty applications can be easily changed to target different cardholders. De La Rue is also providing complete card management and transaction collection for MBNA.
MBNA will test the multi-function Visa smart card with its on-site food and merchandise vendors, which serve more than 2,000 MBNA people. Cardholders can earn frequent-shopper points for all chip-based purchases they make from merchants, and can redeem their points for discounts on merchandise at the point of purchase. In addition, cardholders can receive free merchandise after they have purchased a designated number of items. For example, when a customer buys three entrees at one of the company's dining facilities, a fourth entree can be immediately awarded at no cost.
Unlike most popular closed system programs, the pilot makes use of open architecture and standards which will allow the program to easily be adapted and used elsewhere.
"MBNA's goal is to evaluate this emerging technology's potential to enhance the value of our core credit card products," said David Nelms, MBNA vice chairman. "This may be accomplished by combining different payment methods onto a single card platform or by using the power of the integrated circuit chip to provide more flexible rewards programs, which afford greater benefit to cardholders, affinity groups, merchants, and card issuers."
"The value proposition for smart cards in the United States is being refined as financial institutions such as MBNA evaluate how multi-function smart cards can enhance the services they offer to their customers," said Diana P. Knox, senior vice president of chip products for Visa U.S.A. "With our nation's low-cost telecommunications infrastructure, payment with traditional magnetic-stripe bankcards is accomplished very efficiently today, so it is the value-added services that will increase the value of and demand for smart cards."
"An ambitious test, the MBNA pilot will demonstrate the potential of smart cards in the United States," said David Stonely, president, De La Rue Card Systems, North America. "The future of smart cards lies in sophisticated, multi-function chips like the ones to be used in this pilot. Advanced smart cards promise merchants and issuers tremendous marketing and customer retention opportunities and offer consumers a new level of convenience and financial flexibility."
As the world's best way to pay, Visa is the preferred payment brand and the largest consumer payment system worldwide with more volume than all other major payment cards combined. Visa 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 than 70 smart card programs in 31 countries and on the Internet, with 22 million Visa chip cards, including 8 million Visa Cash cards. Visa is pioneering SET Secure Electronic Transaction(TM) programs to enable and advance Internet commerce. Visa's 642 million cards, generating more than US$1 trillion in annual volume, are accepted at over 15 million worldwide locations, including more than 400,000 ATMs in the Visa Global ATM Network. Visa's Internet address is www.visa.com.
De La Rue Card Systems is the world's leading supplier of bank-issued payment cards, specializing in card integration and customer solutions for banking, telecom, PayTV, retail, transport, health and identification markets. De La Rue, with a 1997 revenue of $1.2 billion, has supplied almost 400 million magnetic stripe and micro-processor based smart cards each year and has produced over 500,000 point of sale terminals worldwide. De La Rue's Internet address is www.delarue.com.
MBNA Corporation, a bank holding company and parent of MBNA America Bank, N.A., a national bank, has $50.2 billion in managed loans. MBNA, the largest independent credit card lender in the world, also provides retail deposit, consumer loan, and insurance products.
SOURCE Visa
-0- 07/06/98
/CONTACT: Greg Jones of Visa, 650-432-2753; or Peter Frank of MBNA, 302-432-1353; or Catherine Zipf of De La Rue, 703-803-3647/
/Company News On-Call: http://www.prnewswire.com or fax, 800-758-5804, ext. 943138/
/Web site: http://www.delarue.com/
/Web site: http://www.visa.com/
CO: Visa ST: Delaware IN: CPR FIN SU: PDT
JH-KA -- SFM021 -- 3321 07/06/98 09:00 EDT http://www.prnewswire.com
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