Ray Van Eng (06/18/96)
The choosen test site is Guelph, ON with a population of about 100,000. This Canadian city is known for its diverse mix of citizens from different social and economic background, its well patronized public transportation system and a wide collection of businesses of all sizes. All these factors constitute an ideal testbed for new technologies. The first phase of the consumer test is to begin in November this year with a planned national roll out of the Mondex card services in early 1998. The Canadian Imperial Bank of Commerce (CIBC), Royal Bank of Canada and Bell Canada are enlisted as major partners. The Mondex card is a credit card size device that has a microchip embedded in the front of the card. The consumer can download cash values from their bank accounts to the Mondex card's microchip via a Mondex compatible Automated Teller Machine (ATM) or a public telephone. When a purchase is being made at a participating merchant, the consumer would place the card into a Mondex terminal and a transaction will take place in about three seconds in which the purchase amount will be deducted from the card. A pocket-size personal electronic wallet keeps a detailed list of all the transactions and lets the user know how much money is still left on the card. Money can also be transferred to and from the wallet, thereby enabling person-to-person transactions (e.g. paying taxi cab fares) without the need of a vendor Mondex terminal. Like the Mondex card, the wallet can also be locked with a security code. The front of the card shows a graphic representation of a twenty dollar bill. This denomination reminds the user that the card itself which bears of the name of the card holder can also be used for purchases other than petty cash expenses. A 1-800 number is also printed on the card so the consumer could call for customer service. Any unused amount can also be deposited back to the customer's bank account. The benefits of the Mondex card is that the consumer could make purchases anonymously just like spending cash yet the card offers greater convenience like never having to carry enough money and shell out the exact amount for each purchase. The Mondex card can also be used to carry five different types of International currencies. This should be a boon for the tourists. For the vendor, transactions are quick, simple and accurate. The entry cost for doing business with such a system is also low because only an inexpensive Mondex card reader terminal is required. Since there are no real cash handling and the transaction values can be locked, the security risk of keeping, counting and transporting coins and notes is greatly reduced. Vendor fraud and administrative errors can become harder to forge. Furthermore, banking can be done anytime during the day (or night) with just a telephone call. Unlike credit cards, the Mondex card has no carrying charges or interest. But with a card like Mondex, the issuing bank not only makes money on the interest on 'floats' (the stored values that are yet to be used), it also benefits from lost or destroyed cards since the bank will not reimburse the unused portions to the customers. The Mondex card could prove to quiet a lucrative venture for the card issuing banks. |