MasterCard International Surpasses 200 Million Smart Card Milestone.

PURCHASE, N.Y. & PARIS -- MasterCard International today announced that it has reached a key milestone on the road to global smart card adoption. As of the third quarter 2004, MasterCard's customer financial institutions have issued more than 200 million MasterCard(R), Maestro(R) and Cirrus(R) smart cards around the world.

This key milestone confirms that global EMV chip deployment on MasterCard payment cards is now entering into a new phase of mass market adoption in Europe, Latin America, Africa, Asia and the Middle East. Forty percent of these 200 million smart cards now carry an EMV chip. These EMV chip cards are currently accepted at approximately 1.5 million fully-approved EMV terminals worldwide, representing an 85 percent increase in EMV-enabled terminals year to date.

"2004 represented a period of significant progress for MasterCard in regards to its global chip initiatives. With the rapidly increasing number of MasterCard smart cards and chip-enabled terminals, we now have the infrastructure in place to facilitate significant increases in transaction volumes," said Dr. Toni Merschen, senior vice president, Chip Center of Excellence, MasterCard International. "Supporting this trend of migration to chip technology is MasterCard's innovative M/Chip Deployment Program."

The M/Chip Deployment Program

The M/Chip Deployment Program, the basis of MasterCard's OneSMART(TM) MasterCard(R) umbrella chip program, supports all aspects of chip migration and is organized around three streams of activities:

--Product Development: Specifications, branded product integration, infrastructure support and services

--Deployment Support: Chip migration services covering business, interoperability and project management aspects

--Vendor Cooperation: M/Chip product development, joint marketing.

At the cornerstone of MasterCard's payment and added value programs, is MasterCard M/Chip 4(TM), a highly flexible smart card application for credit and debit cards. Through the M/Chip Deployment Program, M/Chip 4 is now supported by leading vendors such as Axalto, Austria Card GmbH, Dai Nippon Printing Co., Ltd, Gieseke & Devrient GmbH, Gemplus, Oberthur Card Systems, ORGA Kartensysteme GmbH, Sagem, SETEC OY, STMicroelectronics, Toppan Printing Co., Ltd and Trub AG. Additionally, based on the pre-approved and ready to go MULTOS M/Chip 4 implementation, all card vendors and issuers can take advantage of M/Chip 4 on this highly secure multi-application platform. MasterCard also has key cooperation agreements with ACI, Datacard and Ingenico to enhance support for M/Chip in their product lines.

Value-Added Chip Solutions

To further enhance their smart card business case, MasterCard's customers can leverage MasterCard M/Chip 4 as the technical basis on which to deliver a range of additional value-added applications, including:

--OneSMART MasterCard Pre-Authorized - Allows the cardholder to place an amount of cash in a "pre-authorized" account, which is regulated by the chip's "open-to-buy" counter. The cardholder continues to use the card in an off-line mode until the amount requested exceeds the card's "open-to-buy" counter, at which point funds must be replenished. This new application extends the Maestro value proposition by enabling debit cards to be issued to new customer segments and accepted by new merchant categories. MasterCard and Capitec Bank in South Africa recently announced a pilot of the world's first pre-authorized debit card, using the MULTOS chip platform. Also, MasterCard has recently secured access for its customers to a highly-secure and cost-efficient M/Chip card solution from Atmel and Sagem, which is particularly well suited for Pre-Authorized programs.

--OneSMART MasterCard Authentication Program - M/Chip 4 cards can be used in conjunction with MasterCard(R) SecureCode(TM) to generate the authentication data necessary to guarantee e-commerce transactions. This program, called the Chip Authentication Program, is a smart card-based authentication solution that MasterCard is making available to its issuers as part of its global MasterCard SecureCode solution. It can also be used to increase security for Internet banking and other applications requiring strong cardholder authorization.

--OneSMART MasterCard PayPass(TM) - M/Chip 4 also supports emerging solutions such as PayPass, MasterCard's contactless payment program. As M/Chip 4 is a highly flexible solution that can be customized to meet issuers' needs, it can be offered with the PayPass contactless capability. The single chip application can be accessed either in contact or contactless mode, enabling cardholders to pay with one simple touch of the card.

Pre-Configured Smart Card Packages

The OneSMART MasterCard program includes a range of pre-configured smart card packages that help MasterCard's customers get to market fast. With the recently added OneSMART MasterCard Retail, there are now four distinct packages. Each package includes MasterCard M/Chip and ranges in functionality from a basic, single application payment card to a more robust, Web-savvy card optimized for Internet usage:

--OneSMART MasterCard Payment - provides an enhanced payment application

--OneSMART MasterCard Authentication - ensures a higher level of security for online shopping and remote banking

--OneSMART MasterCard Web - allows cardholders to securely store and manage a wide range of personal data (such as names, addresses, URLs, log-on passwords) on the smart card chip

--OneSMART MasterCard Retail - a new, simple, but powerful, chip package, providing a mass market-oriented solution that greatly facilitates issuers and retailers in developing card usage. It combines payment, loyalty, and cardholder preferences management in a single point of sale transaction.

The widespread shift to chip technology has helped to guide decisions by MasterCard's regional boards in Asia/Pacific, Europe, Latin America/Caribbean, and South Asia and Middle East Africa, who have all recently enacted intra-regional liability shift policies calling for the full-scale adoption of smart cards and chip terminals in the 2005 and 2006 time period. Migration incentives are already in place in most of these regions as well. Also, numerous regions have created 'OneSMART Clubs,' for banks, retailers and other partners to collaborate on strategies for smart card adoption. OneSMART Clubs are already operating successfully across Central and Eastern Europe and in Malaysia, New Zealand, South Africa and Taiwan.

About MasterCard International

MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members' credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard International manages a family of well-known, widely accepted payment card brands including MasterCard(R), Maestro(R) and Cirrus(R) and serves financial institutions, consumers and businesses in over 210 countries and territories. The MasterCard award-winning Priceless(R) advertising campaign is now seen in 97 countries and in 47 languages, giving the MasterCard brand a truly global reach and scope. For more information go to www.mastercardinternational.com.