Mondex Gives Visa A Run For Their Money

Mondex Gives Visa Cash A Run For Their Money

Ray Van Eng (05/28/96)

In a related article, we mentioned that two of the three Hong Kong note issuing banks are involved in launching the Visa Cash cards in southeast Asia. You may wonder what bank number three: the Hongkong and Shanghai Banking Corporation is up to?

Well, they are busy working with Mondex International, a London, UK company in deploying the Mondex card, also a micropayment product to be used in Asia. Actually, they seem to be gaining some headway, giving Visa Cash truly a run for their money.

The Japanese appears to be very serious about this form of cashless card systems. For example, a number of major banks in that country such as The Industrial Bank of Japan, Sakura Bank and Fuji Bank are all considering setting up electronic payment divisions and transaction networks to facilitate the use of Mondex cards which will likely go into experimental use in 1997 in Japan.

Meanwhile, the Matsushita group has developed an IC storage chip and a balance reader for electronic cash systems such as the Mondex card. Hitachi is also reported to have similar systems in the works. Some experts say that if the major Japanese banks join Mondex, they could make the British system an electronic money standard in the world.

Mondex is one of the pioneer in this hotly pursuited arena. In July last year, Mondex has begun a pilot project in London involving 10,000 particpants. The system also went on trial almost simultaneously in San Francisco. More tests are on the way in places like Hong Kong and Canada by the end of this year.

While designed as a convenient 'cash-less' system for purchases of commodity items in public places, the Mondex or similar systems could also be used to pay for small transactions over the Internet such as reading a newspaper article online for ten cents. In such a case, the content provider would simply collect the nickels and dimes online and just make one bulk electronic 'deposit' to the bank at the end of the day.

On the point-of-sale (POS) retail side, Mondex is forging an alliance with Verifone Inc., a leading supplier of secure payment hardware and software systems. With the addition of the new Verifone SC family of smart card solutions, merchants who are using Verifone's existing POS terminals for credit and debit cards payment processing can easily interface with the Mondex card system. This could mean that the Mondex cards could receive a tremendous merchants' support around the world due to Verifone's global market penetration.

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