American Banknote Corp., the New York-based secure document and currency printer, said its Australian subsidiary has won a smart card contract from Telstra, Australia's national telephone company.

The contract, worth at least $13 million over three years, is a potential challenge to the Visa Cash and MasterCard-Mondex electronic purse proposals.

The affiliate, Leigh-Mardon, is to produce cards for Telstra's upgrade of the pay telephone network. Telstra is expected to require at least 10 million chip cards a year. Leigh-Mardon said it will build its manufacturing capacity up to 20 million a year.

"This contract demonstrates our advantage (in) being the major local producer of smart cards in Australia," said Morris Weissman, American Banknote's chairman and chief executive officer.

He said joint marketing by Coca-Cola and Telstra allowing the phone cards to be used in Coke vending machines will give the American Banknote technology a boost throughout the region.

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