MasterCard International is further tightening its grip on the Mondex smart-card venture.

The bank card association, which last month acquired 51% of the global umbrella organization Mondex International, announced an agreement last week to purchase 51% of the company that will own Mondex franchising rights in much of Asia.

MasterCard, based in Purchase, N.Y., also owns 10% of Mondex USA.

The rights covering 13 Asian countries and territories had been owned since September 1995 by Hongkong and Shanghai Banking Corp. That subsidiary of HSBC Holdings PLC will now become a joint-venture partner of MasterCard International, with a 49% interest.

By virtue of its 51% share, MasterCard will be the managing partner.

The transaction, which awaits formal approval by the MasterCard board, is the latest indication of the priority the association is attaching to its Mondex investment. It also reflects the critical role Asia is expected to play in the development of the system described as "global electronic cash."

The Mondex pilot in Hong Kong was an immediate sensation when it was launched last fall, as 12,000 cardholders signed up within a few weeks.

The program is up to 35,000 cards accepted in 420 retail locations, and Hongkong Bank is planning a full rollout in the second half of this year.

G. Henry Mundt 3d, the MasterCard executive overseeing Mondex International, said Hong Kong is "a market that loves high-tech, where (Mondex) can go about as quickly as you can roll it out."

Other markets will see more gradual acceptance, he said, and the owners expect to learn from a variety of pilot experiences, including one in Guelph, Canada, that began this year and another on New York City's Upper West Side scheduled for the fourth quarter.

Mr. Mundt pointed out that when Mondex International chief executive officer Michael Keegan was in Guelph last month, he used an automated teller machine to load currency onto his chip card from an account at National Westminster Bank in London, the bank that invented Mondex.

Mr. Mundt saw the transfer as a tangible sign that Mondex can deliver on its global ambitions.

Asia is seen as a critical link in the chain. When Natwest Group spun off Mondex International to a consortium of "global founders"-there are about 20 equity holders-Hongkong Bank was allocated 28.1% of the shares, second only to Mondex USA's 39.2%.

Those positions were cut roughly in half when MasterCard bought 51% of Mondex International, and they could go down another few percentage points when Mondex fills its remaining voids, likely to include equity allocations to Japanese banks.

The dollar values of Mondex acquisitions have not been disclosed, and MasterCard may be building its equity through investments rather than outright stock purchases. Based on a disclosure that the U.S. franchise was capitalized at $50 million at Natwest's spinoff last July, Hongkong Bank's 28.1% stake would have been worth about $36 million.

Hongkong Bank, which is affiliated with Midland Bank of London, one of the early Mondex supporters, looks to MasterCard's "franchise management expertise" to help extend the system into such countries as China, India, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, and Thailand, said Geoff Bruce, the Asian bank's Asia-Pacific cards executive.

"This move underlines the vital role that MasterCard will play in Mondex's commercial success around the world," said Mr. Keegan of Mondex International. "We now have the winning formula of HSBC's commercial expertise and MasterCard's franchise experience to drive Mondex forward in this key region."

Mr. Mundt, who as executive vice president of global deposit access also manages debit card programs, said he expects MasterCard to boost Mondex's global momentum just as it did for Cirrus after it acquired the ATM network in 1988.

Cirrus, now the largest system of its kind with about 315,000 machines in almost 100 countries, is being "redefined," MasterCard announced last week.

As a first step, Cirrus machines will be enabled to dispense postage stamps, beginning in the second quarter in the United States, and later in other countries as members request the capability.

Mr. Mundt, in an interview last week, said stamp-dispensing is "a first stake in the ground." Cardholders at ATMs away from home might later expect to find prepaid phone cards, transit tickets, ski-lift tickets, and even transaction statements and currency-exchange data.

Many ATM-owning banks are providing "advanced functionality" to their own cardholders, but Mr. Mundt said member banks are now asking for similar network capabilities.

"They want to expand their offerings at the ATM because consumers are demanding it," he said. "In this way, MasterCard is acting as the catalyst to help meet the changing needs of cardholders anytime, anywhere."

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