Bank of Scotland has become the first institution outside the original ownership group to say it will participate in the Mondex U.K. smart card system.

Billed as an "electronic alternative to cash," Mondex is to be tested this summer in the English town of Swindon. National Westminster Bank developed the system with several technology partners and was joined as co- owner of the British franchise, Mondex U.K., by Midland Bank, also of London.

Natwest last autumn signed up Hongkong & Shanghai Banking Corp. - like Midland, part of HSBC Holdings of London - as its licensee for most of Asia and is actively recruiting others around the world.

Tim Jones, chief executive of Mondex, said, "Bank of Scotland's announcement is just the first of many (that will) show the way by which Mondex will rapidly become available to consumers in many countries.

"As Hongkong Bank said when it announced its franchises in the Far East, this is not a closed scheme. It is an open scheme . . . and just like cash, it will not be limited to just some banks."

The $45 billion-asset Bank of Scotland, Edinburgh, is the eighth-largest bank in the United Kingdom and has a reputation for technological innovation. It was the first in the nation to offer home banking and may integrate that service with Mondex.

Bank of Scotland is unrelated to the larger Royal Bank of Scotland, which has bank holdings in the United States.

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