Infighting unravels alliance seeking standard to protect Internet purchases Sandberg, Jared . Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]. 28 Sep 1995:
B10.
ProQuest document link
ABSTRACT (ABSTRACT) The consortium brought together such top players as credit-card rivals Visa International and MasterCard
International Inc., software titan Microsoft Corp. and Internet upstart Netscape Communications Corp. But this
week, the alliance split because of tensions between Visa and MasterCard and their respective technology
partners — Microsoft and Netscape.
Microsoft and Visa this week published a detailed description of a credit-card standard — but with MasterCard
conspicuously absent. MasterCard and Netscape now argue, in essence, that the Microsoft-Visa team is
withholding the technical design to keep its approach “proprietary” and charge software developers and financial
institutions to use it.
“We’re disappointed that Microsoft and Visa have opted unilaterally to take this approach,” a MasterCard
spokeswoman said. She said the Microsoft-Visa details were incomplete, thwarting banks and software firms
developing new applications. MasterCard said it refused to take part in the Visa announcement because it is
“contrary” to the plans for a “single open standard.”
ABSTRACT A consortium to develop a technical standard for protecting credit-card purchases on the Internet has unraveled
because of tensions between Visa International and MasterCard International Inc and their respective technology
partners, Microsoft Corp and Netscape Communications Corp. After Visa and Microsoft published a detailed
description of a credit-card standard, Mastercard and Netscape are arguing that the Microsoft-Visa team is
withholding the technical design. FULL TEXT NEW YORK — A major alliance to develop a technical standard for protecting credit-card purchases on the Internet
has unraveled amid bickering between a handful of heavyweights.
The consortium brought together such top players as credit-card rivals Visa International and MasterCard
International Inc., software titan Microsoft Corp. and Internet upstart Netscape Communications Corp. But this
week, the alliance split because of tensions between Visa and MasterCard and their respective technology
partners — Microsoft and Netscape.
Microsoft and Visa this week published a detailed description of a credit-card standard — but with MasterCard
conspicuously absent. MasterCard and Netscape now argue, in essence, that the Microsoft-Visa team is
withholding the technical design to keep its approach “proprietary” and charge software developers and financial
institutions to use it.
“We’re disappointed that Microsoft and Visa have opted unilaterally to take this approach,” a MasterCard
spokeswoman said. She said the Microsoft-Visa details were incomplete, thwarting banks and software firms
developing new applications. MasterCard said it refused to take part in the Visa announcement because it is
“contrary” to the plans for a “single open standard.”
The spat threatens to break down into an all-out standards battle over how to prevent hackers on the Internet from
filching sensitive financial data such as credit-card numbers. The losers could be legions of users and companies
eager to do business on the Internet.
Banks would be forced to accommodate multiple payment mechanisms, merchants would have to choose one or
another standard or incur greater costs obtaining both systems — passing the costs on to Internet consumers.
“The growth of the industry is going to be impeded,” said Robert Howe, a general manager at International
Business Machines Corp., which has all but sided with the MasterCard-Netscape team.
The dissension shows how, in high technology in particular, the vagaries of competition and ego can overwhelm
high-minded intentions to provide what customers need. Ego is at play in MasterCard’s sniping at Visa, some
executives say. MasterCard didn’t like Visa taking the lead in partnership with the industry’s powerhouse,
Microsoft.
MasterCard “viewed it as a Visa-and-Microsoft deal. And to invite MasterCard in to participate now is awfully late,”
said one executive familiar with the matter.
Ego also seems to be at work in the Microsoft and Netscape face-off. Yesterday James Clark, chairman of
Netscape, asserted that Microsoft had demanded a 20% stake and a seat on the board of Netscape earlier this year
in return for giving Netscape important technical data on Microsoft’s new operating system.
Mr. Clark levied the broadside during an otherwise low-key panel discussion at the Seybold Conference yesterday
