Quiet though it may be in the United States, the Mondex smart card program continues to garner commitments from bankers elsewhere.

In Japan, where Mondex International announced in February the long- awaited formation of a national franchise, the three owners took steps last week to accelerate promotional and partnership efforts with technology vendors and other companies.

Meanwhile, Latin America continues to be one of Mondex's brightest spots. In mid-July it said five organizations had purchased franchise rights for Venezuela, the 10th country in Central or South America with a Mondex venture in place.

The announcements are especially gratifying to Mondex International Ltd. of London and its parent, MasterCard International Inc. of Purchase, N.Y., which are managing to maintain a sense of momentum in the face of North America's relative apathy.

Mondex Canada is moving forward with its second market trial in Sherbrooke, Quebec, after closing its initial program in Guelph, Ontario. The Mondex USA unit has said little publicly since the ending of a pilot on New York City's Upper West Side early this year.

In Venezuela, MasterCard and Mondex attracted four banks as well as a credit card association. They claim an almost 50% share of the retail banking market, said Tim Stewart, executive vice president of the Mondex Atlantic Technology Center. The company can therefore think about "rapid deployment of multi-application smart cards throughout the country," Mr. Stewart said.

The Venezuelan franchisees are Banco Mercantil, Banco Union, Banesco Banco Universal, Interbank, and Consorcio Credicard.

Mondex similarly stoked its optimism with the establishment of Mondex Uruguay by two leading banks in April 1998 and Mondex Chile by six banks in October. The owners also brought sizable market shares in their respective countries.

Mondex has also benefited in Central America through its two-year-old relationship with Credomatic International Corp. of Costa Rica. Given that it is the largest credit card processor in its region, Credomatic's franchisee status gave Mondex needed heft and credibility to compete against the smart card initiatives of Visa International and its well- regarded Latin American and Caribbean organization.

Mondex has been banking on "national decisions" by groups of banks to push the electronic cash program in each country. It said that with the addition of Venezuela's potential cardholder base of 22 million, more than 90 million people in Latin America are now eligible to receive the cards.

The Costa Rican program is 14 months old today and has thousands of cardholders, Mondex said. Its inroads there included an exclusive payment designation by the Central American Institute of Business Administration, known as INCAE, and a multi-application student card program at Universidad Latina.

Card acceptors in Costa Rica are a typical mix for electronic purses, including cinemas, vending machines, and fast-food outlets such as KFC, McDonald's, and Subway.

Mondex is "on the ground" in 60 countries overall, but its total cardholder number remains in single-digit millions, well behind Visa's reported 20-plus million, 10 million of them Visa Cash.

Outside of North America, Mondex has been challenged in continental Europe, where Visa's preference for more auditability of cash transactions has won more bankers' loyalty. Yet there have been signs of movement, particularly in France and the Nordic countries.

The plan in Venezuela is to introduce Mondex nationally this year. Mondex electronic cash would be one of several applications running on the Multos operating system, the crucial technical aspect of the MasterCard- Mondex strategy that competes with alternative approaches packaged by Visa, Proton World International, and Microsoft Corp., among others.

Multos will let electronic cash be combined with credit, debit, and other services "in a highly secure and flexible environment," said Randall Shuken, vice president of MasterCard's chip business for Latin America and the Caribbean.

Plans by the Venezuelan franchise owners "are now under way to aggressively expand the smart card sector," said Arelys Perez Mendoza, general manager of Mondex Venezuela. "Through the Mondex and Multos technologies, the smart card market will spread rapidly as businesses will be able to offer endless possibilities such as customer and merchant loyalty programs, electronic cash transactions, electronic commerce, and Internet banking."

In Japan, the three franchise owners-MasterCard, Sanwa Bank, and the JCB credit card organization-said they will officially launch a Japan Mondex Promotion Council in October. The council's mandate is to generate interest in Mondex in various industries and perhaps grow to a point where it could become the electronic money program's operating entity.

Entities that have been close to Mondex and the charter franchisees have already signed on. They are: Asahi Bank, Sakura Bank, Orient Corp., Hitachi Credit, Oki Electric, Dai Nippon Printing, Hitachi Ltd., and Matsushita.

Other companies actively considering joining and enhancing that nucleus, Mondex said, are: Aplus Life, Mitsui Marine and Fire Insurance, Anritsu, Fujitsu, Hitachi Software Engineering, Japan Card Network, Nichimen, Nissho Iwai, Omron, Toppan Printing, and Toyo Information Systems.

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