Mondex Cards Expand Services

As they're doing in the U.S. and Europe, MasterCard and Visa are conducting trials of smartcard systems in Asia for a variety of electronic-commerce scenarios. These range from the already widely existent single-merchant cards; to electronic wallet cards, such as Mondex; to those for the widely anticipated Internet commerce use.

One of the most provocative uses of smartcards is the Mondex. Recently released in Hong Kong and Taiwan b y MasterCard, this card has previously been used for merchant tasks, such as transport, phone calls, and commercial shopping. In conjunc tion with the so-called electronic wallet, Mondex cards enable users to transfer mon-ey among themselves electronically.

This situation's implications are immense. Tina Chiang, director of member relations for MasterCard International, says, "Central banks all over the world are now concerned about person-to-person electronic money transfers because of the effect on a country's monetary policy." If this form of transaction becomes popular, then central banks will have no way to effectively gauge how much money is in circulation.

Person-to-person electronic money transfers also worry other branches of government. The tax authorities, for example, worry that your boss might pay you with Mondex cards -- which would amount to tax-free paychecks.