By signing a major French bank, Mondex International Ltd. has taken a big argument away from its detractors, chief executive officer Michael Keegan said.

Visa International and other rivals have used Mondex's absence from continental Europe to question the viability of the MasterCard-controlled smart card venture.

But through Credit Mutuel, the 51% owner of Mondex France as of last week, London-based Mondex entered the country that has known and used smart cards the longest.

Mondex had already announced, in August, a Norwegian entry that could lead to a broad deployment in the Nordic region. There is also is Mondex Ireland and the first of the ventures, Mondex U.K.

"I don't want to hear any more that we have no beachhead in Europe," Mr. Keegan said. "That is no longer an issue."

In fact Mr. Keegan, who tends not to sound very celebratory because he moves quickly on to the next battles, paused to crow a bit about this one.

He called it "huge" and "historic."

Richard Phillimore, MasterCard International's senior vice president for chip strategy, said it is "an enormous step into continental Europe." He said Credit Mutuel is technologically sophisticated and put Mondex and its Multos operating system through a "tough decision-making process," making the victory that much more gratifying.

At a press seminar in Paris in June, Credit Mutuel CEO Michel Lucas said he was open-minded about the various system alternatives, liked what he saw in Multos, but was not convinced of any business case.

After "looking very closely at the competing electronic cash systems," he said last Friday, "we believe that Mondex is without a doubt the clear winner. In addition to meeting our needs in France, it is a global system and provides interoperability for Europe and the world."

Mr. Lucas, a MasterCard and Europay International director and chairman of Europay France, said Credit Mutuel will quickly begin a pilot using the Multos platform and incorporating the euro, demonstrating the system's multicurrency capability.

Credit Mutuel, which also took an equity position in Mondex International, will work with Mondex in seeking partner banks for the remaining 49% of the French franchise. Since most of the country's other big banks are Visa issuers, MasterCard and Mondex are hoping for a coalescence that would go against the tide of other, more Visa-friendly electronic purse moves in Europe.

"France is the first European market where a dominant system doesn't exist yet," Mr. Phillimore said. "Mondex has an opportunity to be the dominant system. There is only space for one stored value system in a market."

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