Ultimus Ltd. of Israel, which had been trying for two years to sell a micropayments concept based on smart cards, has been acquired by a new Dutch company called Cardis BV.

Cardis said it is marketing Ultimus' technology as "an extension of today's debit and credit card products into the area of micropayments." It gained quick credibility in the smart card world through the appointment of Robin Townend as president and chief executive officer.

Mr. Townend comes to Cardis with 15 years of experience in the smart card industry, having done pioneering work with Barclays Bank of London and later heading chip card technology for MasterCard International.

The hiring of Mr. Townend, who worked most recently for the Australian- owned point of sale equipment supplier Intellect Electronics, fits a pattern among payment technology companies aiming to capitalize on the coming of the single European currency, said Paris-based payment systems consultant Linda K.S. Moore.

"Companies are lining up senior statesmen with connections to the European Commission to honcho new variations on chip card technology," she said.

With the run-up to the euro getting into full swing, the economic case for prepaid cards that work across borders is stronger than ever, Ms. Moore said.

Ultimus puts a different twist on the common, stored-value change purses prevalent in several countries. It integrates the service with debit or credit cards, and it takes advantage of the point of sale infrastructure.

Each chip would be loaded with a base amount, such as $25. Larger-ticket payments go against credit or transaction accounts. Small-value transactions draw from the stored value, and reloading occurs automatically, when necessary, through the card-terminal network.

A scaled-down version of Ultimus is being piloted in the campus smart card program of the University of Hertfordshire, north of London.

Central to Ultimus' worldwide marketing efforts is the recognition of Mr. Townend, 49, who was senior vice president of Intellect Electronics. Earlier, he spent 27 years at Barclays Bank, the last 12 of them as senior research manager for emerging cards technologies, before moving for a short time to MasterCard in the United States.

Mr. Townend was quick to point out that Cardis is not trying to compete with existing stored-value schemes.

"One of the features of Ultimus is that it is leveraging existing infrastructure," he said. "We are not seeking any major changes to the system-we are offering a methodology to make other schemes more profitable."

Mondex officials said they had not heard of Ultimus, but said it sounded like a competitor. "We believe the electronic cash market is a big one, and there is room for more than one player," said Robin O'Kelly, a spokesman for Mondex in London.

Cardis plans to market Ultimus to banks as an "intellectual property"- essentially, the idea behind the technology.

The technology can work on any platform, so MasterCard and Mondex could use it with their Multos operating system, and Visa could use it in the Java Card environment.

Mr. Townend said the Ultimus approach would eliminate the problems that Mondex and Visa Cash encountered in their joint pilot on New York City's Upper West Side, which is to be terminated at yearend. (See page 6.) New terminals had to be rolled out, and automated teller machines had to be added to allow for reloading, which consumers did not rush to accept.

"All current schemes have adopted the cash replacement notion, and this is something the consumers don't vote for," said Mordechai Teicher, the creator of Ultimus and head of what is now Cardis R&D, the research and development center in Kfar Saba, Israel.

Instead of replacing cash, Ultimus is meant to be an extension of the debit and credit cards with which people are familiar, Mr. Teicher said.

Some who have learned of the Ultimus micropayment-credit card hybrid have deemed it too complicated and expensive.

"You're going to have to go around the world and wire all these combinations into all the equipment in the infrastructure," said Jerome Svigals, an electronic banking consultant in Redwood City, Calif. "It's a logical step, but there are some economic questions and some implementation questions."

For now, the fledgling Amsterdam-based company is focusing on creating awareness, and it was in Paris last week at the Cartes '98 conference for that purpose.

"The product has been received 100% positive by anyone who has devoted sufficient time to listen and understand it," Mr. Teicher said. "There are not enough such people yet, but we're in the process."

Mr. Teicher is working on related innovations, some of which have patents pending.

"We are positioning ourselves as specialists in the area of payment systems, and we'll have a range of products in the payment systems environment," Mr. Townend said. "But we see ourselves as licensing those for the banking community to use."

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