Us Banks Boost Mondex Hopes

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Chase Manhattan, Dean Witter Discover, First Chicago NBD and Michigan National will all join the US offshoot of Mondex, which has developed a plastic card with an embedded microchip which can be loaded with money, then used instead of cash.

Bankers and retailers are showing increasing interest in electronic purses, which can reduce the cost and risk of handling large quantities of cash.

But no one wants to invest heavily in an experimental technology which may never gain general acceptance.

Michael Keegan, Mondexs chief executive, claimed the new group of backers was further evidence that Mondex will be the global standard for chip-based payment products.

 

The move follows the acquisition last month of a 51 per cent stake in Mondex International, the worldwide grouping developing the card, by MasterCard, the global payments consortium.

That has helped bring in Chase Manhattan, the largest bank in the US, since it had previously planned a trial in New York of MasterCards own electronic purse, MasterCard Cash, now axed in favour of Mondex.

However, Chase is also testing Visa Cash, the electronic purse produced by MasterCards arch-rival in the payment card business.

Dean Witter is also seen as a very significant addition for Mondex, since it is the single largest issuer of general purpose credit cards in

the US, with 43m cardholders.

It has a network of more than 2 million merchants who accept its cards.