In its ongoing effort to spark consumer interest in smart cards, Mondex International will link the technology to something it knows people love: television.
Mondex, the British smart card company whose majority owner is MasterCard International, has teamed with a London-based interactive television company, FutureTV Inc., to offer service that charges viewers only for the programs they watch. FutureTV will issue Mondex stored value cards to all its subscribers, who would insert the card into a Mondex-enabled set-top box. The device functions like a sophisticated parking meter, allowing viewers to choose programs and pay only for the time the television is turned on.
Mondex's attempts to promote smart cards as electronic purses for small payments in retail stores have produced desultory results. Mondex executives hope to get people accustomed to using the cards in their televisions, and from there to add other features, such as cash loading.
"It's redefining what you do with the box that sits in the living room," said Norma Hughes, senior product manager at Mondex in London. "You are choosing what you want to watch. It's really a complete shift in how consumers will actually utilize the TV."
FutureTV recently finished five years of development on its product. It is shopping the service to cable and telecom companies and says it is close to announcing an agreement with a telecom company in Europe that wants to use broadband cables to transmit services other than telecommunications. FutureTV executives say the system will be up and running this year in Europe and shortly afterward in the United States.
There are 10 million smart cards in circulation in the United States being used in digital set-top boxes, but they are used only for conditional access, not payment, according to Smart TV magazine.
"We anticipate that this card will be the same card that can be used at the newsstand, for example," said Fred La Galle, Mondex's head of Europe, the Middle East, and Africa.
Viewers will be able to load their cards at their set-top boxes, which would provide connections to their financial institutions, Mr. La Galle said. "Your set-top box will become your ATM."
FutureTV's service, called MiTV, offers subscribers the chance to view previously broadcast shows in addition to regular cable and network programming. It also comes with Internet and electronic mail access.
Most important, according to Mondex, is customers' ability to pay for television in small increments. For example, viewers can order a pay-per-view movie, and if they do not like it after five minutes, get charged for only the amount of time the movie was on.
Other companies are developing digital television systems, but according to a report published last July by Merrill Lynch, FutureTV is closest to offering "a complete convergence service."
Ricky Rand, chief executive officer at FutureTV, said his service "isn't just about the home market."
"We can see the day when people will be able to slip their smart card into a card reader on a plane or train with a LCD television in the head-rest" and, using their smart card, gain access to their personalized electronic program guide.