MasterCard International has almost completed a rollout of a
payment processing system designed to simplify data transfers
between retailers, banks and the credit card company's back-office
transaction-clearing applications.
MasterCard said 97% of its 25,000 card issuers worldwide had
started using the IP-based payment system and that 99% of the
member banks in the US had also migrated.
The system uses a virtual private network (VPN) to run a secure
messaging service that offers a standards-based format for
transmitting purchase authorisation, clearance and settlement data
between retailers, banks and MasterCard, said Rob Reeg, senior
vice-president of systems development at MasterCard.
MasterCard began the project six years ago and has invested about
$296m (£191m) to develop the VPN and build the datacentre. "This is
the biggest technology change MasterCard has ever done," Reeg said.
"It gives us a globally integrated platform."
But the company still has more work to do to tie together its
worldwide operations. Reeg said MasterCard had yet to choose sites
for regional IT service centres in Asia and South America.
A European service centre is operating in Belgium, but Reeg said
MasterCard was only halfway through a five-year plan to converge
its systems with those of MasterCard Europe.
MasterCard announced proposals for the payment processing system in
April 2001 and began converting banks to it late last year. The
move followed Visa's rollout of an IP-based payment processing
network for US banks in late 2000.
MasterCard is using technology from existing vendors such as IBM,
EMC, Sun, Oracle and Storage Technology, to support the payment
system. "We didn't want to add another layer of complexity into
this by changing vendors," said Artie Ahrens, senior vice-president
of computer and network services at MasterCard.
Outside the datacentre, MasterCard is using 700 IBM Netfinity
servers to function as what it calls "member interface processors".
The Netfinity systems, which are located in the facilities of
different member banks, direct data traffic from merchants to
credit card issuers and then to MasterCard.
The secure messaging service is based on the International
Organisation for Standardisation's 8583 message set. Purchase
authorisation requests can now be processed in less than 150
milliseconds, compared with about 650 milliseconds using
MasterCard's older, proprietary approach.
The messaging platform also lets banks process clearing
transactions up to six times a day instead of having to run a
single batch job.