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The Mondex Smartcard

The Mondex smartcard, developed by the MasterCard corporation, was developed and introduced in the 1990s, and is designed to offer a more streamlined approach to bank cards, as well as a practical alternative to carrying cash. Essentially, the Mondex is meant to replicate cash transactions as nearly as possible, while eliminating certain issues involved in using cash. Consequently, the Mondex is identified as an “electronic purse”, a terminology encouraged by MasterCard to render its purpose more clear to the public.

In terms of advantages, the Mondex system has become noted for raising the bar in technology and security maintenance, as it was the first such card to undergo the E6 level of evaluation by the Information Technology Security Evaluation Criteria (ITSEC), the international organization dedicated to promoting the highest standards of security within electronic transactions. Each card bears a protective, personal identification number of the owner, as with other bank cards, and Mondex is committed to consistently applying the most advanced updates to its security systems. Also, and created as a key component in the Mondex design, the card employs a microchip and has no magnetic strip. This gives it a far greater degree of safety, as magnetic strips are commonly accessed to obtain personal and financial information, and to perpetrate fraud.

Another advantage, and something of an innovation in this kind of electronic finance, is that funds within a Mondex card can only be moved to another Mondex card, which makes the system proprietary, and consequently more secure. Then, and going to the true experimental aspect of the card, the Mondex is intended to act as a “mini PC”, and perform functions no bank card may. The technology of the Mondex is such that the card can store thousands of times more information than a bank card, and this provides a great deal more of potential functionality for it. For example, the card can hold personal preferences, purchase e-tickets, and save reward points. Also, the Mondex offers a benefit which may appear to be a liability, in that no money may be spent that is not already within the card. People are accustomed to credit cards, and in some cases debit card systems, that permit charging; with Mondex, this is not an option, and no consumer can spend more than they currently have in the “purse”.

One of the disadvantages to the Mondex smartcard actually derives from its unique asset as a self-contained, highly secure system; that is, when a card is lost, the money contained in it is gone, just as it would be if actual cash were lost. The funds remain encrypted and may not be accessed by anyone else, which strongly discourages theft. A basic and accidental loss of the card, however, denies the owner the option of recovering the money through other means. Virtually all banks with online presences guarantee protection of lost funds. The Mondex, relying on its “purse” aspect, provides no such security, and the lost Mondex translates to lost irretrievably money.

There are other downsides to the Mondex smartcard, although these may be eliminated with advanced technology. One is that only a certain number of transactions is accessible for the user to review, whereas bank cards typically store and offer all purchase information. Another disadvantage is that the card denies anonymous buying; as each card is unique and identified by its owner's information, it is not possible to make a private purchase.