Ray Van Eng (07/10/97)                       

There is now more news after the Mondex stored value smart card system swipe through Canada as we have reported earlier.

First up, Scotiabank, a Visa International loyalist and the last major hold-out that has not joined Mastercard backed smart card system has announced that it is now part of the Mondex Canada team.

CANARIE, a Canadian government and private sector consortium created in 1993 with an aim to develop the Information Highway in Canada, has agreed to provide major funding for a project in which MPACT Immedia, the Royal Bank of Canada, Tandem Computers, Quebecor Multimedia and Global Payment Services will bring the Mondex smart card system to the Internet for secure electronic commerce.

The $1.2 million project calls for the development of a single Internet based payment system that will not only handle smart cards, but also credit card transactions with the SET protocol and E-cheques service that build on the experience MPACT Immedia and Royal Bank have gained during an earlier effort in which the two companies worked on a business to business electronic payment system.

With the three type of services enabled through a secure infrastructure over the Internet, full scale electronic commerce (in any dollar amount from pennies to millions) will be forthcoming to what industry experts have predicted will be in the hundreds of billions of dollars within the next ten years.

Security is mainly provided by the use of smart cards with digital certificates and cryptography engines that encrypt data for safe transport over the Internet.

The smart cards are read by MPACT Immedia’s BuyWay system which currently processes Internet credit card purchases from any buyer in the world and provides settlement with any bank in Canada or the United States.

The BuyWay system is reputed to be one of the most advanced Internet payment scheme around. Reader's Digest Canada, a MPACT  Immdeia customer used the BuyWay system to handle credit card purchases of books, CDs, magazines, videos and other products at its web site.

Smart card readers will be standard equipment in many new computer keyboards from vendors such as Hewlett-Packard, Keytronics and others.

Verifone Inc.'s home banking smart card reader -- the Personal ATM -- will be distributed to consumers for use with the upcoming Manhattan, NYC smart card trial Visa International and Chase Manhattan Bank will be conducting later this year.

Verifone and HP have agreed to a merger earlier this year.

One of the objectives of the New York City pilot is to test the compatibility between different smart card standards -- Visa Cash, Mondex and EMV (Euorpay, Mastercard and Visa), a popular European smart card protocol.

In some way, the Canarie project is related to the NYC trial scheduled for October this year. If combined together, the two tests could create an end-to-end secure smart card based consumer payment system that can be used for both online and offline transactions.

The Canadian CANARIE project is "to develop a totally secure, state-of-the-art payment service which can be marketed throughout the world." In the words of Brian Edwards, president and CEO of MPACT Immedia.