Contingency Planning for Y2K

Visa USA's Scott Thompson on Contingency Planning for Y2KCIO: What is Visa USA doing to prepare for year 2000 beyond remediating its own systems?

We have a team interacting with our member banks and the processing community as well as with infrastructure providers and service providers like AT&T, IBM and others to determine the status of their year 2000 initiatives and what the likely impact is on us. These efforts include continuing discussions with several agencies of the U.S. government to ensure collectively that we are positioned for success as year 2000 approaches.

In addition, we have a very aggressive communications strategy focused not only on internal Visa people but also on the external constituencies, including cardholders and merchants.

Finally, we have a team working on scenario analysis, which includes probability analysis of where in the industry we are likely to experience problems and, from a contingency planning perspective, what actions we are going to take as problems happen around the world.

Where do you think Visa needs to develop contingency plans?

We fully believe that before the end of this year all of our core mainframe systems that run this business will be year 2000 compliant, tested to ensure they're so and rolled into a year 2000 compliant production environment. That said, the bank card industry and the payments processing industry around the world form a very interdependent technology environment. We really need others-in fact, many others-to be year 2000 compliant, to have our card work all around the world on Jan. 1, 2000.

How do you manage that interdependence with other industries?

There are something on the order of 14 million merchants that accept the Visa card around the world today. For the very large merchants that bring us very heavy transaction volume, including hotels, airlines, the oil industry and a lot of the big retailers, we're taking active efforts to ensure not only that our system works but that they can send us transactions in a test mode to ensure that our systems will work together.

Our Visa system does not connect directly to very small merchants around the world. There's a processing community that allows a single terminal merchant operation to connect to a processor and then connect to us. We really need to be sure as best we can that those terminals are going to work. There are multiple layers of technology at work here, many of which aren't specific Visa proprietary technologies.

What if something along the way doesn't work?

We've asked our service providers such as AT&T questions like, What happens to your voice and data network if multiple phone companies around the world happen to fail on Jan. 1? That's an appropriate dialogue to have in an attempt to try to understand the cascading impact of failures.

What Y2K advice do you have for other CIOs?

If they haven't moved their thinking along to scenario analysis, probability analysis and contingency planning for events that are going to happen, they absolutely have to focus on that step. If they wait, there just won't be enough time to put a contingency plan in place.

Spotlight On:

Scott Thompson, executive vice president of systems development, support and customer service at Visa USA Inc., San Francisco* Line of Business Consumer payment systems* Bio Executive vice president since 1997; before that, CIO for Barclays Global Investors* Day to Day Manages the U.S. data processing environment for the VisaNet Services Group. Also serves as executive sponsor for Visa USA's year 2000 project* Challenges Enhancing systems flexibility without compromising peak service levels, and enabling faster time-to-market for new products and services

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