MasterCard International and 724 Solutions Inc. (TSE: SVN; NASDAQ: SVNX) today announced a strategic alliance to develop and deliver global infrastructure software solutions for conducting payment transactions using mobile phones, personal digital assistants (PDAs) and other Internet-enabled devices. With the development of these technologies, MasterCard's member financial institutions worldwide will be able to use 724 Solutions' technology to extend highly secure payment capabilities to customers who can make purchases or pay bills using wireless devices.
Under the terms of the agreement, 724 Solutions, an Internet infrastructure software solution provider for financial institutions, will work with MasterCard to jointly develop secure payment solutions to facilitate mobile transactions. In addition, 724 Solutions will incorporate payment transaction functionality based on MasterCard's family of payment programs - utilizing both magnetic stripe and chip technology - into the 724 Solutions Financial Services Platform.
MasterCard's member financial institutions will be able to take advantage of the ease of 724 Solutions' scalable technology to meet the rapidly growing demand for mobile commerce. Strategy Analytics, a leading industry analyst firm based in Wellesley, MA, estimates that mobile commerce will reach 14 billion transactions with a total market of $200 billion by 2004.
"MasterCard is taking the lead in developing payment services that allow our member financial institutions to improve their business efficiency, and offer better services and convenience to today's consumer," stated Art Kranzley, senior vice president, Electronic Commerce and Emerging Technologies, MasterCard International. "By incorporating the 724 Solutions Financial Services Platform and MasterCard's family of payment programs into our members' existing systems, consumers will be able to securely buy goods and services, pay bills, manage investment portfolios and make travel arrangements using an array of mobile devices."
Working with key MasterCard member financial institutions, MasterCard and 724 Solutions plan to implement this mobile commerce solution in key markets around the world, in conjunction with selected mobile operators and handset manufacturers. Pilot testing of the service is expected to roll out later this year.
As part of the agreement, 724 Solutions will also incorporate MasterCard into the digital wallet functionality that it is developing. Wireless wallet technology is a flexible method of payment allowing consumers to conduct secure payment transactions from their mobile phone, personal digital assistant, or other Internet-enabled device.
"Together with MasterCard and our customers, we are taking a huge step forward in creating a convenient and secure mobile payment mechanism that will accelerate the development of mobile commerce," said Greg Wolfond, CEO of 724 Solutions. "Combining our strengths and global approach - including common partners and clients - in this preferred relationship with MasterCard, will propel our vision forward and enable our customers and partners to more quickly realize the substantial opportunities that the mobile Internet affords."
In addition to this partnership, 724 Solutions will contribute to MasterCard's Global Mobile Commerce Team (GMCT), a diverse group of international companies working together to enable consumers to use mobile phones to conduct business.
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