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MasterCard has announced the first implementation of its Multos (multi-application operating system) chip card with credit and loyalty functions in Japan.

 MasterCard said Japan's fourth-largest retailer Mycal Card Co will move its five million credit and loyalty cards from magnetic stripe to Multos chip.

 The announcement follows Visa's release of its first JavaCard with Standard Chartered in Singapore last month.

 JavaCard holders will be allowed to shop and make credit payment on the Internet, and also accumulate bonus points from associated retailers and to withdraw cash from automated teller machines. JavaCards are to be issued later this year, to be followed by Mycal's Multos card early next year.

 The Mycal cards, which support credit and loyalty functions, have no big difference from the existing magnetic-stripe version.

 Robert Wilson, senior vice-president for advanced payment systems at MasterCard Singapore, said the initial chip-based Mycal cards - which will have an eight-kilobyte memory - will enable issuers to add new applications and change old functions without reissuing the cards.

 The Mycal chip cards with the JIS (Japan Industry Standard) magnetic stripe also will support ATM access.

 ATM access via the on-card Multos chip would be allowed when chip-enabled ATMs were installed by member banks, said Mr Wilson.

 'Most banks have not made up their minds on how to migrate to chip technology,' he said.

 Some Japanese banks, according to Mr Wilson, are trying proprietary chip-based systems.

 In addition to banks, retailers have to invest on infrastructure upgrade to accept chip cards.

 Mycal Card Co said it would install the necessary systems and equipment for a 'significant portion' of its 300 outlets, including department stores and supermarkets throughout Japan.

 Japan was the first country to implement the Multos with multiple applications because silicon and smart-card vendors Hitachi and Dai Nippon Printing, which offered Multos cards to Mycal, were the initial members of the Multos consortium Maosco, said Mr Wilson.

 MasterCard will announce one to two more Multos implementations in the region by the end of this year, according to Mr Wilson.

 Refusing to disclose who they were, Mr Wilson said issuers of Mondex, MasterCard's electronic cash, also would be the pioneers to adopt Multos.

 More than a million reloadable Mondex cards have been issued in 21 places throughout the world including Hong Kong.



Japan gets first Multos card application