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The parent company's results have improved, but mainly because of reduced telecommunications costs.
But Germany, its largest overseas market, with 2.6 million members, is still hobbled by high telecommunications costs.
To reduce telecommunications costs, European merchants process credit card transactions in batches rather than individually in real time, the standard practice in the United States.
The trouble, Mr. Tachikawa said, is that Japanese people already spend an average of about 5percentt of household income, or $200 a month, on telecommunications costs.
"In the United States, our telecommunications costs are low and our fraud rate, knock on wood, has been so low that the rationale for the chip card has never existed," Mr. Pascarella of Visa said.
In contrast to Europe, where smart cards have been used for a decade to fight fraud and reduce telecommunications costs, there is hardly anything that can be done with one in the United States.
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We agree that the telecommunications cost recovery mechanisms should evolve for the 21st century ("New Rules for New Technology," editorial, Feb. 24).
It's built on falling telecommunications cost, and the transfer of voice, and data, and information, in an era of service economies.
He said Japan's resistance to further deregulating telecommunications was costing Japanese consumers and businesses by making them pay high prices for service.
Further European declustering may be in the offing, with improved telecommunications, lower cost of living and less regulated markets strengthening the hand of other locations.
While Metro Center claims to have one of the county's most sophisticated computerized telecommunications systems, costing about $5 million, Schwager said his firm "didn't know to ask about the telephone system". Rather, he said, the company liked the centralized location of the building and felt a "good chemistry" with the landlord.
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