National Australia Group of Melbourne has strengthened its already solid support for the Mondex system by buying a 5% stake in the venture's original national franchise, Mondex UK.

With the purchase, National Australia affiliates Yorkshire Bank, Clydesdale Bank in Scotland, and Northern Bank in Northern Ireland join three others eligible to issue Mondex smart cards in the United Kingdom.

Those are the two Mondex UK founders-Natwest Group, which invented the technology, and Midland Bank, both of London-and Bank of Scotland.

In terms of spreading its influence around the Mondex world as an equity owner, $125 billion asset National Australia is beginning to rival two other key participants: MasterCard International, 51% owner of the London- based umbrella body, Mondex International, and a direct stakeholder in franchises such as those in the United States and Asia; and HSBC Holdings, the parent of Midland Bank and co-owner with MasterCard of Mondex Asia.

Besides its U.K. interest, National Australia is one of the four owners of that country's franchise, which has overlapping ownership with that of New Zealand; is a 10% owner of Mondex USA through subsidiary Michigan National Bank; and participates in Ireland through National Irish Bank and in Vietnam.

Andrew Douglas, National Australia Group's head of payments for Europe, said the U.K. purchase is a "further significant step in our involvement in Mondex." He said the institution has thoroughly investigated electronic cash alternatives and decided Mondex "offers the greatest potential benefits to consumers and retailers alike."

National Australia has not revealed details of how it intends to put its Mondex interests to work, but the bank seems to be signaling that it wants to be a leader in implementing the technology. The newspaper Australian Financial Review, citing inside sources, reported that a plan is being hatched to adopt the system in several global markets starting with Australia, with details to be announced in the new year.

Elsewhere in the Asia-Pacific region, Mondex Asia and two HSBC affiliates, Hongkong & Shanghai Banking Corp. and Hang Seng Bank, observed the one-year anniversary last month of their 165,000-card program in Hong Kong, the largest in Mondex.

More than 700 automated teller machines are available for loading value on the cards' computer chips and more than 7,000 merchants are participating.

"In contrast to other electronic cash programs, the people of Hong Kong are actively signing up as opposed to being issued a card," said Mondex International chief executive officer Michael Keegan. "More important, people are reloading their cards, using them regularly, and making them a part of their everyday life. This makes Hong Kong a global leader in the acceptance and usage of Mondex electronic cash and is a very impressive endorsement of our product."

Officials said they are looking to extend Mondex acceptance to buses and parking meters and will be introducing the Multos operating system, crucial for putting multiple services on the cards, in 1999.

Mondex is in lively competition with Visa Cash in both Australia and Hong Kong, both seen as "early adopter" markets for technology. Visa has a larger Hong Kong program in terms of cards distributed. The major Australian banks have worked with both Visa and Mondex but National Australia has clearly tilted toward the latter.

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