Tuning the Transaction Network

Computerworld - In recent years, both Visa International Inc. and MasterCard International Inc. have made sweeping changes to their once-proprietary transaction processing networks in preparation for the Internet age.
Purchase, N.Y.-based MasterCard, for instance, has upgraded its Banknet from a peer-to-peer network, mainframe-centric environment to the industry's first Internet Protocol-based network that provides virtual private network connections to member banks.
Last year, MasterCard also rolled out a new Global Clearing Management System, which gives members more control over how customer transaction data is handled and provides members with links to emerging payment channels such as wireless and the Internet. The platform uses a mix of client/server and mainframe technology, from companies such as Sun Microsystems Inc., Oracle Corp. and Cisco Systems Inc.
The system also allows international member banks to customize their processing needs to local markets. For instance, international banks can now choose their own daily settlement times instead of conforming to U.S. clocks. They can also determine which currency they want to settle in, instead of having to convert to U.S. dollars, says Rob Reeg, senior vice president of systems development at MasterCard.
Driving the changes is the increasing globalization of credit card use. Credit cards are also being used for a wider variety of purchases and through a wider variety of payment channels than ever before, he says.
Visa, in Foster City, Calif., is similarly refurbishing its own pre-Internet VisaNet for the new era.
For instance, the company's new Visa Direct Exchange, which was rolled out last year, is aimed at making it easier for member banks to launch new payment technologies such as electronic checks, smart cards, wireless commerce and person-to-person e-commerce.
Direct Exchange connects to Visa's original VisaNet and allows cardholders to make purchases through any device such as a laptop, personal digital assistant or wireless phone. In addition, like MasterCard's Banknet, Visa's network also supports separate clearing and settlement processes in 53 countries.
"Doing business with all these banks and merchants around the world requires us to be more flexible," says Visa CIO Scott Thompson.

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