MasterCard mulls full ownership of Mondex International

MasterCard International has reached an agreement in principle with the other shareholders of Mondex International to assume full ownership of Mondex International (MXI) and direct control of all of MXI’s operations and management.

The proposed agreement, which is subject to the final approval by MXI shareholders, would increase MasterCard’s ownership share from the current 58 percent.

Under MasterCard’s management, MXI will continue providing service to the MULTOS consortium – the open industry forum that manages the MULTOS smart card platform, which is MasterCard’s preferred operating system for multi-application smart cards.

MXI will also continue managing Mondex electronic cash and the Mondex Certification Authority and security infrastructure, in addition to providing ongoing support and services to the Mondex franchisees and licensees.

"As a founding shareholder of Mondex International, we are very pleased with this development," said David J. Mills, general manager, HSBC Bank. "This agreement will streamline the governance and management of MXI’s products and services, providing greater flexibility to meet the needs of MXI franchise holders in the rapidly-evolving marketplace."

"This acquisition is closely aligned with our strategy of giving MasterCard’s member financial institutions access to the best and most secure choices available in the marketplace and strengthens MasterCard’s overall position in smart card development by leveraging Mondex’s technological expertise under one roof," said Chris Thom, senior executive vice president of MasterCard International.

More than 75 issuers are now committed to issuing 20 million additional MULTOS smart cards. More than 70 companeis currently supply MULTOS-related products and services.

The Mondex certification authority, located in a highly secure facility, maintains best-in-class security and operations capabilities. It manages a well-established process for chip security and analysis. The authority handles issuance of certificates globally for the MULTOS "load and delete" mechanism, Mondex e-cash and the MasterCard M/Chip family of payment applications. MasterCard is also evaluating offering the certification authority services to other industry participants requiring key management services.

Mondex Electronic Cash is the most complete and fully developed electronic cash proportion in the marketplace today and offers a number of unique benefits, including: the only truly global and interoperable electronic cash product available today; multi-currency capability; the only card-to-card payment capability; offline transactions with immediate value transfer; and the highest security currently available.

With virtually no per transaction cost, Mondex cash offers essentially zero marginal cost for the issuer. Mondex electronic cash has been franchised or licensed for use in 55 countries and territories around the world. There are approximately 30 Mondex implementations underway around the world, with additional activity expected over the coming year.