Mondex International said it made an important stride last month by establishing a franchise for southern Africa.

Owned by the two largest banks in South Africa, the entity gives Mondex a foothold on that continent and an opportunity to put its smart-card-based electronic cash system to work in a developing economy.

Mondex, which is 51% owned by MasterCard International, will also collide yet again with the competing Visa Cash system, which began working late last year with four other South African banks.

As in other clashes between the bank-owned brands of automated cash, Mondex is claiming an advantage in that its system is technically consistent around the world, whereas Visa's programs, while more numerous than Mondex's, still have incompatibilities.

The African franchisees, ABSA Group and Standard Bank of South Africa Ltd., both of Johannesburg, "wanted to commit to a global electronic cash platform," said Gerry Hopkinson, head of corporate affairs for London-based Mondex International.

Noting that South African banks have a tradition of relying on proprietary technologies, he said the Mondex decision reflected those institutions' interest in "joining a global community of banks."

The Mondex South Africa announcement-the franchise rights also cover Lesotho, Namibia, and Swaziland-coincided with the banks' decision to introduce Maestro, the MasterCard debit card brand, which is expected to have a more immediate impact than the smart card.

Standard Bank and ABSA's Amalgamated Banks of South Africa have a combined nine million checking account customers who immediately will have an international deposit access service added to their automated teller machine cards. MasterCard called this "the largest mass electronic empowerment ever in South Africa, where only 5.3% of the population has access to credit."

Maestro will essentially pave the way for Mondex. Once Maestro is fully deployed, the banks will use the Mondex Multos operating system to gradually convert the magnetic-stripe debit cards into chip cards.

Given its history of apartheid and wrenching poverty, the South African economy presents a relatively clean slate for payment system innovations. The society's cash orientation and high proportion of unbanked people may make it receptive to an automated form of cash and the related banking capabilities of Mondex.

Chris Potts, deputy chief executive officer of Mondex International, said the technology is tailor-made for an emerging economy's "drive to a fully banked population."

The Reserve Bank of South Africa's general manager of information technology, Philip Tromp, called the Maestro move "a positive and very important step in the evolution of South Africa's national payment system." He said an electronic purse like Mondex "could, over time, reduce the need for physical cash."

"Our research shows that consumers in markets such as South Africa, where plastic is available to only a small percentage of the population and security is a concern, would welcome a new way for purchases that is secure and convenient," said G. Henry Mundt 3d, MasterCard's executive vice president of global deposit access.

"Both Maestro and Mondex offer these advantages over cash and checks," he said.

He added that the combination of Maestro and Mondex on a single card would be a first.

Mr. Hopkinson said the South African rollout of Mondex could be 12 to 15 months away and deployment the entire infrastructure could take two to three years. But that would be shorter than the timetables in many more developed countries where chip cards will have a harder time muscling aside older forms of payment.

The Mondex officials said they expect other South African banks to join the franchise. The company argues that the innovation lends itself to a "national decision," as occurred this year in Canada when all the major banks, including some that had been working with the competing Visa and Proton systems, joined Mondex.

In a parallel with South Africa, Mondex Canada began with the country's two largest banking companies, Royal Bank and Canadian Imperial Bank of Commerce. The South African banks that have signed with Visa are First National, Nedcor, NBS Bank, and Boland Bank.

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