Column: Mondex smart cash card looks promising

The Mondex smart cash card looks like it could pass this sceptical columnist's usefulness test.

Information technology writers are forever being bombarded by new products that are, we are assured by their proponents, going to change the world.

It isn't long before a certain scepticism seeps in. If I hear the term "paradigm shift" one more time, I swear I won't be responsible for my actions.

I've developed a little test. If I leave an interview with the latest fairground barker of the information age and , between there and the office, see a viable use for the product then I figure there's some merit for it.

Last week Mondex came to town. For the Wellington launch of Westpac and Trustbank's Mondex offering, at Lambton Quay's Westpac branch, a crowd including Reserve Bank Governor Don Brash, Privacy Commissioner Bruce Slane, and Consumer's Institute head David Russell were invited to pick up their Mondex smart card, and go shopping at a mini "Arkwright's Shop" (Arkwright was played, most excellently, by Mark Hadlow).

Earlier in the day I spoke to Michael Keegan, head of Mondex International, who says the stored value card will, in effect, turn every telephone into an automatic teller machine, and overseas the company is partnering with telcos.

"We haven't got that far here yet, but it's obvious we will be talking to the local carriers," says Keegan.

"Basically it's money on the card," he says. "And if you need some more money you can top it up."

Such cards have the ability to cut right through most of the processes involving cash transfer, he says. Telcos in effect replace tellers. In a typical transaction, customers and shop staff don't need to fiddle with change, the business doesn't need to worry about security, nor does it have to spend time "cashing up" at the end of the day and transporting the money to the bank. And the bank doesn't have those cash handling costs either.

In short, technology such as this could well herald the much talked about imminent shakeout in the local banking industry. The day I talked to Keegan the news was all about National Australia Bank's rumoured bid for Westpac and what this would mean for the market. (Keegan's tip, incidentally, is that the purchaser is Hong Kong Bank, not NAB).

One of the reasons the shakeout has been delayed for so long is that local banks have such a major investment in mainframes that the costs of change are too high. Put smart card technology together with further amalgamations and you've suddenly got a much more economic proposition.

The card won't mean another box on the counter for retailers, says Keegan. Mondex works with current EFTPOS technology, meaning the key issue--merchant acceptability--is going to be less of a struggle.

Other services can be added to the card. For example, an English university is using such cards for financial transactions around campus, plus library issues and voting in student union elections.

The company has run regional trials in the United Kingdom town of Swindon and in San Francisco in the US.

Money can also be transferred form card to card, with a little "electronic wallet" about the size of a pocket calculator.

The target for the card?

"Everyone," says Keegan. "It's not like a credit card, where you want to restrict it. Basically this is a replacement for cash, and everyone uses cash. Even children can have one - a parent can put a certain amount on their child's card - just like an allowance."

The company is still investigating using the card over the Internet. The technology's been worked out, says Keegan; the next stage is working out a commercial offering.

Catching a taxi back to the office after the interview, I ran into problems--the smallest bill I had was a $20 note, and the driver couldn't change it. Now here, I thought, I could see what Keegan was on about.

And as I walked across the road to the office I met, coming the other way, a protest march of striking financial sector workers.

Hmm, I thought. If you think you've got problems now, just wait ...

(Hosking is a Computerworld reporter in Wellington. Email him at rob_hosking@idg.com.)

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