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MasterCard Launches Global Virtual Private Network

[November 12] MasterCard International launched today a virtual private network (VPN) for conducting secure electronic transactions at points throughout the world.

Developed in conjunction with AT&T, the VPN, accessible only to authorized parties, is designed to enable MasterCard and its partners worldwide to process payments over a scalable network that can support high bandwidth demands.

The high bandwidth load is especially crucial to MasterCard and its partners in anticipation of the volume of transactions taking place during the upcoming holiday season.

"MasterCard is the first global financial services network to leverage the advantages of VPN technology to prepare its system for the demands of the 21st century. The new network enables MasterCard members around the world to participate in a global payments economy that is increasingly card-based," said Jerry McElhatton, president of Global Technology & Operations at MasterCard.

The VPN was developed to help countries such as Vietnam, China, India, Colombia, and Bolivia take advantage of the technological advances being made in other parts of the world.

MasterCard reports it has already increased its network capabilities in the U.S., Canada, and Singapore, as well as established a gateway in Europe through its partner Europay. The company predicts that by the end of 1998, gateways will have been established in Latin America, Asia Pacific, the Middle East, and Africa.

The gateway hubs are essential for decreasing the amount of time it takes to process transactions. The switching hubs will be employed to handle the in-country transactions, rather than having the processing sent via satellite to a U.S.-based switching point or to another country's hub, only to go back to the original destination for authorization.

"We are committed to bringing the payments infrastructure as close to local markets as possible," said McElhatton. "The creation of global and local hubs allows far more transactions to be handled in-country or in a specific region, allowing for quick delivery and more efficient use of resources."