Road to Cashlessness Paved With Plastic : Technology: A vast information network brings closer the day when money will blip, not jingle.

You’ve handed the credit card to the store clerk, who slides it through an electronic device and awaits the signal that authorizes your purchase. In the 20-odd seconds that pass while you’re staring at the ceiling, an incredible information journey takes place.

It’s a journey that few consumers comprehend, but it’s a forerunner of the cashless society, the utopian vision where the jingles of nickels and dimes are replaced by the electronic blips of the digital age.

For the 300 million Visa credit cards in existence, the journey probably includes a momentary stopover in this Washington suburb, home to a nondescript building casually called the Ft. Knox of the credit card industry.

Although Visa’s competitors, Mastercard International and American Express Co., also boast advanced technology, Visa is the leader in the plastic card world. In the United States alone, Visa has about half the market share, compared to the 27% held by Mastercard and 20% by American Express.

The Visa International Operations Center East is one of two hubs for the credit card association’s vast information network, a system it expects will play a much greater role in the daily lives of households worldwide.

Visa, owned by its member banks, operates a computer system known as VisaNet that functions as an intermediary among merchants, the merchants’ bank and the bank that issues a customer’s credit card.

The network encompasses 9 million miles of fiber-optic cable that links about 20,000 banks and other financial institutions and 10 million merchants in 247 countries and territories worldwide.

Most of the 11,000 transactions per minute that traverse McLean or its sister “super center” in the British city of Basingstoke involve credit cards. The system also handles a range of consumer payments, from cash withdrawals from automatic teller machines to direct deposit of payroll checks.

Visa expects such electronic banking networks to play an even more important role in consumers’ lives as interactive television and other advances in technology gain wider acceptance.

“Somebody has to build the tracks that go from the home to the bank, and then from one bank to another bank, to handle these transactions,” said Charles T. Russell, Visa’s outgoing president and chief executive. “We have those tracks today.”

Many of the tracks have been laid at the checkout counters of major stores throughout the country.

Here’s what happens after you hand your card over to the sales clerk:

It is swiped through a device called a point of sale terminal, which reads your account number, purchase amount and expiration date from the card’s magnetic stripe on the back.

The point of sale terminal automatically connects by phone to one of 1,400 small Visa computers, which funnel the information into the Visa network and asks the bank that issued your card to authorize the sale.

If the store lacks a card reader, the sales clerk telephones the information to a bank operator, who will query the Visa system.

Once the account information makes it to your bank, the computers ask several questions:

* Is your card stolen? Your bank checks a special encrypted code and a central electronic file of stolen credit cards.

* Does the purchase exceed your credit limit?

* Is the purchase unusual and way outside your normal buying habits?

The computers answer this question by instantly examining whether your purchase fits within your established record of buying behavior. Although some consumers might regard that as an invasion of privacy, it is considered a useful way to help prevent unauthorized use of your card.

Once these questions are satisfactorily answered, your bank will issue a green light back through the system and authorize the sale. The entire process typically takes six to 20 seconds.

What if your bank’s computers are too busy or incapacitated? Then Visa’s computers can step in and authorize the sale if the purchase doesn’t exceed a predetermined amount. This speeds the process and prevents bottlenecks.

After you’ve walked off with the purchase, the second half of the transaction takes place. The store, the store’s bank and your bank have to settle the tab, or clear the transaction. This also is done through VisaNet, but it typically takes about 3 1/2 days.

The system continues to grow rapidly, by about 14% in 1992. Visa expects the annual dollar volume of transactions on its network to double to $1 trillion by 1998.

Despite this growth, Visa executives acknowledge that their goal of replacing cash is a long way off: Credit cards were used in only 15% of all retail sales last year, Russell said.

Getting people to accept the idea that plastic can replace cash as currency is the most formidable barrier to Visa’s vision, said Roger L. Peirce, executive vice president of Visa International.

Despite Peirce’s pride in the Visa technology--he boasted that the system didn’t have a single minute of downtime as of early December--further improvements are critical.

“If we get to a point where society actually expects to get access to their money anytime and anywhere, this system has got to work,” Peirce said. He concluded with the mantra of the credit card world: “We’ve got to be better than cash and checks.”

Credit Trek

Merchant slides card through an electronic cash register that funnels magnetically coded information by phone into the Visa network.

Visa computers relay information to the issuing bank and ask for approval. Issuing bank responds with approval or rejection. The round trip takes six to 20 seconds.