What is a smart card?
A smart card is the next natural step in the evolution of today's plastic payment cards. Each smart card has an integrated circuit chip embedded into it, which gives it the power to perform many different functions. Thus, having a smart card is like having a PC in your wallet. With their ability to store up to 80 times more information than magnetic stripe cards, smart cards will allow financial institutions to deliver more personalized products and services providing consumers with custom-tailored cards to suit their individual lifestyle.

With a smart card, consumers will have the capability to carry multiple currencies when traveling; make secure purchases over the Internet anytime, anywhere; pay for public transportation and public phone calls; as well as make traditional credit and debit purchases – all with significantly fewer cards.

What are the major benefits smart cards offer consumers?
Smart cards offer consumers the ability to hold multiple applications on a single card, separately and securely. The applications a consumer chooses for their card will determine the benefits received. Some of the most common smart card applications today include; credit, debit, electronic cash, loyalty, electronic ticketing, secure identification, driver's license, and health care records. So, a major benefit of smart cards is their ability to hold multiple applications, thus allowing banks to custom-tailor cards to meet the unique needs and preferences of their individual cardholders.

In addition, smart cards also offer the ability to manage or control expenditures more effectively, fraud reduction, reduced paperwork and elimination of the need to complete redundant, time-consuming forms. Moreover, cardholders will be able to use their cards to make payments across a wide range of new delivery channels such as the telephone, interactive TV sets and the Internet.

How is a smart card different from the magnetic stripe card that I carry in my wallet?
Existing magnetic stripe cards have limited capacities to carry information. A smart card carries up to 80 times more information than today's magnetic stripe cards. It can make a decision, as it has relatively powerful processing capabilities that allow it to take a variety of factors into consideration before authorizing a purchase, for example.

What is a multiple application card?
Many smart cards have the capability of carrying multiple applications or applications, so essentially you are reducing the number of cards in the wallet by combining your existing cards into just a few.

How many programs can I have on one card?
Similar to the evolution of the computer, the bigger the chip the more programs you can hold on the card at one time. Since the industry is in its infancy, you may be able to hold two or three programs at first, however the chip's capacity is quickly expanding, therefore increasing the number of programs feasible.

How does a smart card credit or debit transaction differ from a current MasterCard transaction?
It is virtually the same. Instead of 'swiping' the card through a card terminal it is 'dipped' so the chip can be read, so the main difference is the terminal at the merchant has a chip reader in addition to the magnetic stripe reader.

What makes MasterCard so sure smart cards will catch on?
Smart cards make it possible for consumers to make purchases over PCs, to access home entertainment via set-top boxes, and to work from home or on the road with the aid of lap tops and digital phones. In fact, in recent years the telecommunications, transportation, personal computer/software industries, as well as governments around the world have been aggressively moving to incorporate smart card technology into their businesses. For example, smart card readers will be standard equipment on Microsoft's enormously popular Windows platform. France Telecom has already issued over 850 million smart phone cards to its customers. And, in the U.S., the Clinton Administration is now gearing up to meet an ambitious goal of having all U.S. government employees use one single smart card for a range of purposes by the year 2001.

First, there is the fact that chip technology is quite literally springing up all around us, in what some have labeled the advent of 'pervasive computing.' The fast-growing processing power of today's chip technology combined with the steady decline in prices has turned the chip into the cheapest and most efficient way of controlling thousands of familiar devices, from airplanes and dishwashers to traffic lights. This trend is having important implications for the way we conduct our lives and manage our businesses.

How will smart cards make shopping on the Internet more convenient?
Electronic commerce is expected to top $320 billion by 2002, and smart cards bring two essential enhancements to this burgeoning marketplace. These are enhanced security and portability.

As noted above, smart cards offer far greater security protections to the consumer than today's magnetic stripe cards. This enhanced security will be evident in the online environment as well. In addition, smart cards will allow consumers to make secure electronic commerce purchases anytime, anywhere they go. This is simply not possible today because when you make an online purchase, the electronic proof of your identity (which is validated by your bank) is actually locked inside your PC. With smart cards, this electronic proof of your identity is actually carried on your smart card, thus allowing you to make secure purchases anywhere you travel, leading to a dramatic explosion in electronic commerce around the globe.

Moreover, the growth of electronic commerce will also be spurred by the widespread use of electronic cash, a new payment method which is now being gradually introduced to consumers all over the world. MasterCard's electronic cash product, called Mondex, is truly the most 'cash-like' of the electronic cash smart cards which are beginning to be introduced as a more efficient alternative to physical cash. Mondex will take cash where it cannot go today – over the Internet, through the phone lines and via set-top boxes attached to 'pay-per-view' TV systems. Over the next few years, electronic cash will move from its current limited, experimental phase to a national roll-out phase in countries around the globe.

What is Mondex electronic cash?
Mondex is a payment system, based on smart card technology, which offers an alternative to paying cash for goods and services. To date, Mondex franchises have been sold in over 50 countries on five continents, with a potential cardbase of 3 billion people. Mondex continues to take hold around the world and successful implementations now exist in Canada, Hong Kong, New Zealand, the U.S. and Australia.

How does Mondex work?
Mondex electronic cash smart cards store and dispense cash electronically, making bills and coins less necessary. It transfers funds over phone lines, making it easier to reload your smart cards. You can use this system wherever you see the Mondex sign. A Mondex wallet allows person-to-person payments. A Mondex telephone or Internet link lets you make this person-to-person payment anywhere in the world. The card can store up to five separate currencies at the same time.

Can I check what I have spent with my Mondex electronic cash smart card, and where I've made those purchases?
Yes. Mondex-compatible ATMs, telephones, and wallets include a statement key that lets you check the last ten transactions on your card. You'll get an instant electronic statement showing how much you have spent and where and when you spent it.

What is a Mondex wallet?
A Mondex wallet is a pocket-sized device with one or two card readers and its own electronic purse, a keyboard, and a screen. Wallets can transfer value to and from Mondex electronic cash smart cards, allowing you to make person-to-person payments without handling cash.

Will Mondex make cash redundant?
Mondex is an alternative to cash, not a replacement. About 90% of the world's payments are currently made in cash, and it's unlikely that Mondex will change that completely. However, there will certainly be many places where consumers as well as retailers will prefer Mondex over cash.

How will Mondex affect my other payment cards?
Mondex is an alternative to cash transactions because of its benefits for consumers and retailers. It is faster than handling conventional currency, and in many cases safer and less expensive. Credit and debit cards offer a different set of benefits than Mondex electronic cash smart cards, such as revolving credit and interest-free periods. These different types of payment cards will be able to co-exist easily.

Will I spend too much with the Mondex electronic cash card?
With Mondex, you can only spend the value you have loaded, and no more. The chip keeps a record of your transactions, which you can see at any time by using the statement key on a Mondex wallet, telephone, or ATM.

What happens if I lose my Mondex electronic cash smart card?
Because Mondex electronic cash is like physical cash, if you lose your smart card, you'll lose the balance of Mondex electronic cash held on that card. It would be the same as losing bills or coins. The difference is that your Smart Card is useless without your code to unlock it, so nobody will be interested in stealing it. Also people finding lost Mondex cards often turn them in.

Do I need to enter a PIN at the cash register to complete my transaction?
No. Your PIN is only required for access to your bank account using debit. You will not need it for individual sales transactions.