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HSBC signs up for NatWest smart card

John Willcock,Financial Correspondent
Friday 21 October 1994 23:02 BST
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NATIONAL Westminster bank made a significant breakthrough for its Mondex 'smart' cash card yesterday when Hongkong and Shanghai Banking Corporation signed up to franchise the revolutionary new service in the Far East, China and India.

Mondex is a payments system developed by NatWest, which enables the electronic storage of money on a card containing a microchip.

It can be used to pay for goods and services in the same way as cash, and the 'cash' can be transferred from one card to another, or to and from a bank account, using a range of Mondex devices or specially designed phones.

A pilot scheme for Mondex using 40,000 people in Swindon will be launched in association with BT next June, and pending its results the Far Eastern operation will start in 1996.

Neil Hockaday, of HongkongBank's card products division, said HSBC was talking to other banks to act as sub-franchisees in countries such as Singapore, Malaysia and Taiwan. He hoped that talks with banks in Europe, the US and Japan would bear fruit in a few months' time.

'We need to test the market, to see how Mondex will be received. We need to see how quickly we can sign up retailers and attract customers.'

A key issue is gaining approval for Mondex from the central bank in each country, since the card will be an active part of the money supply.

'We are well ahead in talks with the Bank of England, central banks in Europe, and the US Federal Reserve,' Mr Hockaday said. 'We accept it may be more difficult in developing countries.'

He said Mondex aimed to form 10 per cent of all cash transactions in the UK by the year 2000. Despite the rise of credit and debit cards, 90 per cent of all transactions in the UK were still done by cash.

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