Ray Van Eng (03/03/97)
It was the start of the Mondex stored value smart card trial in North America, and officials from Bell Canada, and representatives from the participating banks used special Nortel telephones to wire money across town from a Mondex card to the headquarters of the Guelph and Wellington United Way campaign. That amount ($132.97), which commemorated the date, was to be part of a $10,000 donation that Modex principals including the Canadian Imperial Bank of Commerce (CIBC), the Royal Bank of Canada, Bell Canada, Credit Union Central of Canada and Hongkong Bank of Canada have chipped in for charity. Mondex, a UK smart card system is the only electronic cash system in North America that uses phone lines to dispense cash. 250 Nortel's Millennium payphones and all 36 Royal Bank and CIBC automated banking machines (ABMs) in Guelph have been converted to allow the use of the built-in memory chip in the Mondex card to store monetary value. In addition to handling Mondex transactions, the Nortel Millennium payphones also feature quick access keys that can be used to provide interactive consumer services such as public service announcements, emergency assistance, information, directory and advertising services. More than 2500 Nortel PowerTouch 360 personal screen phones were being distributed throughout the community to aid in the trial. These screen phones serve as smart card readers to allow consumers to review their purchases (the last ten transactions are recorded on a card) and as automated teller machines (ATM) for the transfer of money from bank accounts to the Mondex cards at the comfort of their own homes. More than 500 merchants that virtually cover the entire city of about 100,000 people would accept the Mondex as payment where cash was once used. One of the unique features of Mondex is the ability to make person to person money transfers from one card to another without routing through a central computer. This feature offers much greater convenience for consumers as it enables easy money exchange with street vendors, taxi cab drivers, between family members or among friends. Mondex can also be used to pay for public transportation, parking and vending machine purchases. No more searching for coins and shelling out the exact amount. Since during the course of a transaction, no personal identification number (PIN) or authorization is required, Mondex touts itself as being a low cost system to operate. The Canadian Imperial Bank of Commerce (CIBC), the Royal Bank of Canada, and the Credit Union Central of Canada (which represents 900 credit unions across the nation) are the three financial institutions actively engaged in the Mondex trial in Guelph. The Hongkong Bank of Canada (HKBC) which does not have a branch in Guelph but nevertheless a member of the Mondex Canada alliance watches closely on the sideline. HKBC's parent, the Hongkong and Shanghai Banking Corporation (HSBC) played a pivotal role in implementing the Mondex card in Asia. HKBC will be participating in the Mondex national roll-out in Canada expected in 1998. In the meantime, HKBC will serve as a conduit between the three Canadian banks directly involved in the trial and HSBC in sharing trial results in Canada and around the world. Currently, the Mondex card is being piloted in Swindon, England, Hong Kong, San Francisco, New Zealand etc. The Mondex franchise has recently established an entity in Japan to promote its product. There is also a counterpart in the U.S., the Mondex USA which is formed to pursue similar goals of prophesying the Mondex system. Back in October 1996, Mastercard International has purchased a 51% interest in Mondex International with the remaining 49% owned by more than a dozen other banks and financial institutions from around the world. Mastercard has indicated that they will not be investing in any other electronic cash or purse system in the future, but the Mondex card will support other major International standards such as the EMV protocol that is widely used in Europe. One of the benefit of this arrangement is that a worldwide standard could be emerging for e-cash. All these activities from Mondex exert some very major pressure on Mastercard's long time competitor, Visa International who is currently the market leader which accounted for half of all credit card purchases in the world. Visa has its Visa Cash which offers many similar functions as the Mondex card. Visa Cash has been tested at the 1996 Summer Olympics in Atlanta, GA, and has been used in Hong Kong among many other places. Visa is just as aggressive in establishing the Visa Cash system as a global standard as Mastercard with its Mondex card. In an upcoming article, we shall take a look at how Visa Cash is planning to invade the Mondex home turf in the United Kingdom. |
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