LETTER : The money in your card

Peter W. Tomlinson
Saturday 01 April 1995 23:02 BST
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MONDEX, the subject of "Not-so-smart card will flop, says City" (Business, 26 March) is a true cash card, storing cash which, although in electronlc form, is still within the money supply controlled by the central banks. None of the proposals from the EMV consortium (Europay/Mastercard/Visa) offers a card that stores cash. The EMV proposal is for a debit/ credit card, which may be extended to allow tokens to be stored; ie something that you buy from them and which is not directly backed by the central banks. Mondex is cash and is not centrally accounted and audited; EMV's debit and credit system is centrally accounted and audited but is not cash.

If you and I use the EMV system we will have to pay for the computers that maintain audit trails and send out bills. Yes, we will be able to use EMV's tokens in outlets that accept them and transactions will, for cost reasons, probably not be audited (just as Mondex transactions are not audited), but I still think that the backing of Mondex by a central bank is worth having.

Peter W Tomlinson

Bristol

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