MasterCard charges ahead with messaging overhaul

The holiday season is MasterCard International Inc.‘s busiest time of the year, but the credit card company set the wheels in motion five years ago for the largest infrastructure change in its history.

The peak period for

MasterCard is actually Nov. 15 to Jan. 6, but the completion date for one of its more comprehensive technology overhauls is April of next year. The project is an ISO-based messaging system called IMP, which is replacing a 27-year-old proprietary system called INET.

Five years ago, MasterCard laid the groundwork with a virtual private network (VPN) based on an AT&T frame relay backbone and has been gradually adding new applications to run on the infrastructure. According to MasterCard executives, the VPN improves transaction time from 250 milliseconds to 1.9 milliseconds.

INET has received many enhancements during its lengthy career, but it had “”pretty much reached the end of its useful life,”” said senior vice-president of systems development Rob Reeg.

“”Every process has been re-engineered from end to end and re-written,”” said senior executive vice-president Jerry McElhatton. “”Our old systems were very good, but very mature. This open architecture gives us more flexibility.””

MasterCard tapped a number of partners to help it make the transition, including a partnership with an Indian company, which wrote roughly half of the new code, and Toronto-based Oasis Technology Ltd., which supplied the middleware.

MasterCard has been using Oasis’ Foundation middleware for several years, but the company ported over to the latest version, 7.3, to build the IMP messaging application, which carries financial clearing information.

“”We worked with them to develop the platform on which the actual system itself runs,”” said Oasis’ senior vice-president of R&D Alan Tibbles. “”We recently ported it to the latest version of our system . . . at end of last year/beginning of this year.””

Oasis helped MasterCard put the ISO-based messaging system on Foundation 7.3 in Toronto, then shipped it to MasterCard’s technology centre in St. Louis, Mo., so they could deploy it in other regional centres.

“”All the changes that we’ve recently introduced are technological changes to allow greater stability, much higher throughput, better management capabilities to the basic system,”” said Tibbles. “”The mailbox system, through which all the transactions are delivered, are much more efficient.””

Oasis has sold its middleware — and some of the applications it builds on top of that middleware — to other credit card companies like Visa, Diner’s Club and American Express. The company is actually part-owned by Visa.

All of MasterCard’s issuing banks around the world will have to move over to the IMP format by April 2003. Some may incur late penalties before that deadline expires. Those who don’t make the move will simply no longer be issuing banks. One of the best-known issuers of MasterCard in Canada, the Bank of Montreal, was unable to provide a spokesperson to comment on this story at press time.

More than 97 per cent of MasterCard’s member banks will have moved over by the end of this year (beating the original target of 80 per cent). The first bank moved over about 18 months ago, which was about the time that card issuer National Bank of Canada (NBC), drew up its business plan to make the transition.

“”MasterCard International is always telling us in advance that these kind of projects will be coming,”” said NBC’s manager of support and implementation for electronic solutions Manon Leger.

“”There’s a time when each issuer has to decide when they will do it. In our case, we decided that we will wait. Of course, we wanted to see if others were converting first to make sure we did the best project that we could.””

The decision to go ahead with the transition meant converting internal software packages “”to be able to recognize whatever transactions we were receiving,”” said Francine Jomphe, who oversees all the project managers within NBC’s electronic solutions payment divisions. “”We could have chosen put a converter between MasterCard International and ourselves in order to convert all the transmissions, but we decided instead to modify our systems in order to be able to recognize this new format.””

NBC’s internal applications had to be converted to be able to send, as well as receive, information over IMP. Jomphe wouldn’t say how much it cost the bank to make all these changes, only that “”it wasn’t cheap.””

“”At the time, we had to make business cases, because it’s a lot of money,”” added Leger. “”It’s not a small project. Because it’s really detailed, a lot of testing had to be done. That was the longest part, I’d say.””

There was a significant amount of testing on MasterCard’s end before the banks even touched it. “”We pumped 30 million transactions through it to test it and had more than 400 people working on it,”” said Reeg.

But by using an ISO-based format, the company can handle a variety of information, including private label credit cards from banks and even messages from other credit card companies.

The messages can contain more details about each transaction, said Leger. “”I would say that in the long run, we will see all the benefits. It’s more flexible for future needs.””

National Bank completed its transition in September — plenty of time before the shopping really starts to get serious.


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