The great smartcard standoff began in earnest last week in Singapore as Visa International launched the Java-based payments platform it wants to be "the new shape of money".
The credit card giant wants the smartcard industry to converge around its new multi-application-capable Visa Open Platform based on Java, which it is offering to its rival, Mastercard.
Mastercard wants the industry to converge too — but around the Multos OS developed by its Mondex subsidiary.
Nicholas Fung, head of chip and debit card services at Standard Chartered, the bank which helped launch the card last week, said his bank would like to see Visa and Mastercard working more closely together. "We don't want to run two systems."
Standard Chartered has previously issued cards supporting loyalty programmes in both Singapore and Hong Kong, along with "smart credit cards" with health insurance, tele-phone and retail companies. It is arguably the world leader in chipcards for banking services, and its apparent commitment to Visa's Java solution will be seen as a blow to Mastercard. It comes only a week after the South China Morning Post reported that Mastercard had further delayed the launch of Multos in Hong Kong, saying banks were too busy with year 2000 issues to upgrade for Multos.
Visa has also begun signing up members for a users' group for its open platform, and two of the first banks to join have been the Commonwealth Bank of Australia and the Australian Westpac Bank — both of which bought equity in Mondex in 1996, shortly before Mastercard took its 51% stake in the company. No New Zealand banks have signed up yet.
The somewhat ungainly name of the Visa Open Platform based on Java is an indication of the lengths Visa is going to avoid calling its solution an operating system. It consists of a set of APIs which sit in ROM on a chip card alongside the JavaCard 2.0 APIs released by Sun Microsystems. The APIs will be able to run on top of any OS proprietary OS which has a Java VM.
Fung says the the Java solution is good for banks because, once written, card applications could run anywhere.
Ironically, given that most of the excitement about smartcards in recent times has focused on stored value, the Standard Chartered cards will not offer electronic cash. Singapore has its own thriving cash-card system and the co-operation of the government may well have depended on that boat not being rocked. Fung says e-cash would be added to the cards for a release in Hong Kong, where a Visa cash system is already running.
Standard Chartered's cards carry applications for credit payment, loyalty, relationship and SET (secure electronic transmission protocol). The chip on the card carries both SET certificates and the holder's private encryption key. Fung launched the card by conducting SET transactions over Singapore's SingaporeONE broadband network — but rather than a Web browser, used a kiosk based on the SELECT (Smart Electronic Loyalty E-Commerce Transaction) system developed with the University of Singapore.