InformationWeek
Defining The Business Value Of Technology
November 17, 1997
MasterCard Taps AT&T For VPN
Flexibility, service guarantees offered
The IP network, which replaces an X.25 packet-switching network, will ride on top of AT&T's ATM and frame-relay network and interconnect to networks run by WorldPartners, a 17-member alliance of carriers that provide common global networking services.
Because MasterCard will be using a public infrastructure to run a network that's essentially private, the company will be able to change network capacity to cope with seasonal fluctuations. In the past, MasterCard focused all of its engineers every August on preparing for the holiday season. Then in February, the network would have 40% more bandwidth than it needed. "Now
the network is soft- ware-designed," says Arthur Ahrens, senior VP of operation services for MasterCard International. "If you want an extra 28 Kbps, you got it."
The company says the new network will cut transaction waiting times in half-to less than 300 milliseconds-for the companies that connect point-of-sale terminals to MasterCard's 23,000 member banks.
MasterCard wouldn't disclose the value of the 10-year AT&T pact but says the network-which the carrier is deploying this year and next-will pay for itself in less than five years. The contract stops short of full outsourcing. AT&T will install, monitor, and plan the network, but MasterCard will monitor the network applications and remain the liaison with member banks.
MasterCard is the first WorldPartners customer to enter a "single signature contract" that legally and financially designates AT&T to act on its behalf with WorldPartners' other member carriers. The contract also includes end-to-end service-level guarantees, promising
the reliability that MasterCard wants as it enters an era of cash carried in the memory of a microchip on a smart card.
With credit-card transactions, if a link is down between the card issuer and a merchant, the merchant will check a MasterCard database to see if a customer is creditworthy. But there's no database that says how much cash a smart card has stored on it. The network "has to be anywhere, very on time, and every time," says Ahrens. "Unlike in the credit-card business, there is absolutely no room for failure."
asterCard International is deploying a 70-country virtual private network in a deal with AT&T that flexibly moves the credit-card company into an era of electronic money and sets new standards for global network contracts.
Featured Microsite
