MasterCard and Europay Advance Security Standards for Online and Remote Purchases.

Business & Technology Editors

PURCHASE, N.Y. & WATERLOO, Belgium--(BUSINESS WIRE)--March 14, 2002

Major Steps Toward Widespread Adoption of Universal Cardholder 

Authentication Field (UCAF) Across PC, Chip and Mobile

Platforms

MasterCard International and Europay International today announced worldwide developments for securing electronic and mobile commerce transactions, and for extending a payment guarantee to online merchants.

MasterCard's member financial institutions can now offer a unified solution for authenticating EMV (Europay/MasterCard/Visa) smart card cardholders using MasterCard's Universal Cardholder Authentication Field (UCAF(TM)) a standard, globally interoperable method of collecting cardholder authentication data at the point of interaction across all channels, including the Internet and mobile devices. The EMV smart card and UCAF combination is particularly well suited to regions in which smart cards have been widely issued, and there is a need for secure authentication in non-face-to-face environments. In Europe, for example, MasterCard is currently supporting 90 EMV chip migration projects.

UCAF is intended to guarantee payment to online merchants by presenting, collecting and passing cardholder authentication information generated by issuers and cardholders. Once collected by a merchant and their acquirer, this information is communicated to the issuer in the payment authorization request and provides explicit evidence that the transaction was originated by the accountholder. UCAF fully supports MasterCard(R) and Maestro(R) credit and debit transactions and gives issuers a secure way of enabling debit over the Internet, thus opening the door to more cross-border transactions with merchants in countries where debit is dominant.

In MasterCard's European region, unique developments including Europe's first EMV smart card and card reader combination utilizing the UCAF railway are underway. MasterCard has created a global standard for the use of EMV combined with UCAF to secure virtual world commerce. Once read through the PC reader, the EMV smart card can serve to both authenticate the cardholder at the time of the transaction and provide a cryptographic signature for the main transaction data elements, thereby completing the authentication cycle. EURO Kartensysteme (EKS), a leading German banking association, in adherence to MasterCard's global standard, has recently teamed-up with other key industry players to deploy this combined solution to its German-based cardholders.

"MasterCard's global standard, as implemented by EURO Kartensysteme, using EMV smart cards in conjunction with the UCAF transport mechanism is the ideal medium to allow for both proper cardholder identification and to ensure that only those transactions approved by the cardholder can be financially settled," said Stephen W. Orfei, senior vice president, e-Commerce and eB2B Center of Excellence, MasterCard International.

Payment Guarantee

To make guaranteed online payments a reality, MasterCard has implemented the UCAF messaging requirements in its global authorization network and has mandated member financial institution support by April 2002. With the UCAF deployments in place, MasterCard is positioned to extend its payment guarantee to both the electronic and mobile commerce channels. The payment guarantee will provide online merchants with new cross-border transaction opportunities, as well as boost consumer confidence in online shopping.

"With the combination of the EMV smart card standard and the UCAF transport mechanism, MasterCard and its members are addressing one way to deliver a complete e-commerce solution that provides value to all those involved in an online transaction: members, merchants and cardholders," said Orfei. "By utilizing UCAF to authenticate the cardholder in conjunction with chip technology or other security solutions, online merchants can receive a global payment guarantee similar to the one merchants have experienced with physical point-of-sale transactions for the past 35 years."

In MasterCard's European region, online transactions will be guaranteed when both merchant and acquirer support the UCAF specification, effective April 2002.

In the U.S., plans are currently under review for the payment guarantee to be extended for fully authenticated cross-border online transactions in the fourth quarter 2002.

Similar plans are scheduled for other key markets around the world throughout the year.

About MasterCard International

MasterCard International is a leader in global e-business. The association is focused on providing its member financial institutions with customized, meaningful global e-business solutions that connect them to their accountholders. Through its investment in industry innovation, participation in standards development and business alliances, MasterCard is staying in the forefront of technology integration to enable anytime, anywhere payments across multiple channels and various devices. MasterCard's global e-business solutions include Internet security, smart cards, mobile commerce/wireless, business-to-business electronic commerce, and numerous emerging technologies.

MasterCard International has a comprehensive portfolio of well-known, widely accepted payment brands including MasterCard, Cirrus and Maestro. More than 1.7 billion MasterCard, Cirrus and Maestro logos are present on credit, charge and debit cards in circulation today. An association comprised of more than 20,000 member financial institutions, MasterCard serves consumers and businesses, both large and small, in 210 countries and territories. MasterCard is a leader in quality and innovation, offering a wide range of payment solutions in the virtual and traditional worlds. MasterCard's award-winning Priceless advertising campaign is now seen in 80 countries and in 40 languages, giving the MasterCard brand a truly global reach and scope. With more than 22 million acceptance locations, no card is accepted in more places and by more merchants than the MasterCard Card. At September 30, 2001, gross dollar volume exceeded US$704 billion. MasterCard can be reached through its World Wide Web site at http://www.mastercard.com.

About Europay International

Europay International, headquartered in Waterloo, Belgium, is Europe's leading payments organisation, dedicated to providing a tailored product range and support services to its more than 9,000 Member banks. At present, 291.1 million cards (Eurocard(R)-MasterCard(R), Maestro(R), Cirrus(R) and eurocheque) provide European and global debit and credit card services, and offer cash access to Europe's largest network of more than 305,800 ATMs in 43 countries. Through its alliance with MasterCard International, over 600,000 ATMs and more than 22 million retail locations worldwide accept Europay products. Europay's website at www.europay.com gives a detailed view on the company's products and services and shows how Europay offers its Member banks both support and leadership on issues including virtual commerce, chip technology, security & risk management, and the advent of the euro.

This press release contains forward-looking information. Although MasterCard believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from the forward-looking information contained in this release include: MasterCard's ability to achieve its strategic objectives; whether the terms of the transactions will be approved by MasterCard members and Europay shareholders; MasterCard's ability to realize the contemplated benefits of the transactions; changing market conditions; and other matters. MasterCard disclaims any obligation to publicly update or revise any forward-looking information.