E Commerce Case Study Report on MONDEX:

Contents of this Report:

Abstract i

Acknowledgement ii

4.1 Mondex Company Overview.. 1

4.2 Working of Mondex. 2

4.3 Mondex Smart Card. 3

4.3.1 SmartCard Memory. 4

4.3.2 SmartCard Processing Power: 5

4.3.3 Programming Languages: 5

4.4 Mondex Electronic Cash. 5

4.5 Mondex Wallet 6

4.5.1 Fees and  Costs. 6

4.6 Benefits of Mondex. 6

4.6.1 Consumer Benefits. 6

4.6.2 Merchant benefits. 7

4.7 Conclusion. 8

Bibliography. 9

                                                                                                                         

4.1 Mondex Company Overview

 Mondex is a smart cardelectronic cash system which was originally developed by National Westminster Bank in the United Kingdom and subsequently sold to MasterCard International. Mondex launched in a number of markets during the 1990s, expanding from an original trial in Swindon, UK to Hong Kong, Guelph, and New York. It was also trialed on several British university campuses from the late 1990s, including the University of Edinburgh, University of Exeter (between 1997 and 2001), University of York, University of Nottingham, Aston University and Sheffield Hallam University.

Mondex is an offline payment system and does not require using network infrastructure as in the case of credit and debit cards. This eliminates the involvement of banks or a financial institution in the actual transfer of money. However, participating banks and financial institutions across locations should be able to provide support, money transfer facilities to customers irrespective of their card's originating location.

Mondex is termed as a closed system and hence requires a Mondex payment processing system installed at the point of sale.  Devices which enable processing of Mondex cards need to be made available at maximum possible locations. This would increase the use of plastic money and contribute to network effect of the e-cash system in general.

Although the fee per transaction cost is not applicable to Mondex cards, merchants need to invest onetime costs such as buying the card reader and Merchant Mondex cards to store exchanged values. Use of Mondex in electronic marketplace needs a special card reader connected to the PC to enable payment online. Strategies to make these devices cost effective would help in increasing the popularity of product.

In countries such as India, merchants transfer the service charge of transactions with credit or debit cards onto the consumer, although this is not advised by the credit card companies. This prohibits the growth of any alternative payment system. It is necessary to ensure that such transfer of charges is not done by Merchants using Mondex. Developing a feature to disable the embedded chip remotely would help prevent fraud due to stolen or lost cash cards.

(Detail will be published later)

4.2 Working of Mondex

 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.

Mondex stores value as electronic information on a microchip, rather than as physical notes and coins. Value is exchanged securely from the chip on the card to a chip in a terminal/card reader.

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.

The MONDEX scheme structure consists of six constituents who operate in various roles. MONDEX International, a subsidiary of Mastercard International, operates, owns, and administers the scheme. They license the use of the scheme to these participants:

(Detail will be published later)

4.3 Mondex Smart Card

A smart card is like a mini-PC in your wallet, and it can do anything a computer can be programmed to do. The possibilities for smart cards are virtually unlimited. MasterCard is focused on how a payment card can be enhanced with new functionality, like e-tickets, rewards points, personal preferences, and secure ID to name a few uses.

Smart cards can store thousands of times more information than traditional, magnetic stripe cards. This enables smart cards to perform multiple functions and to make use of high security mechanisms such as advanced encryption and biometrics.

(Detail will be published later)

4.3.1 SmartCard Memory

SmartCards use several types of memory, all implemented within a single chip. These are:

·         Permanent memory

·         Programmable nonvolatile memory

·         Volatile memory

Permanent memory is generally ROM (Read Only Memory), placed in the chip hardware at manufacturing time. It cannot be changed, although its operation can be blocked through logic operations. Programmable nonvolatile memory is generally EEPROM (Electrically Erasable Programmable Read Only Memory). It can be programmed after chip manufacture, exposing both its strength and its weakness. E-squared (as it's affectionately called) permits making changes to programs, increasing the Smartcards flexibility but also exposing it to various types of nasty security attacks. Volatile memory is generally RAM (Random Access Memory), used as a temporary storage area for interim operations. It loses its contents when power is removed from the chip. SmartCard programming requires special skills since programs must be written using the smallest amount of memory possible. One major factor in understanding SmartCards is realizing the implications of when a program is added to what type of memory. If a program is added in ROM, it must be added when the basic chip is manufactured, and no changes can be made to it. If programs are added to EEPROM, they can be added both prior to issuance of the card or afterwards.

(Detail will be published later)

4.3.2 SmartCard Processing Power:

Most Smartcards today use 8-bit microprocessors. Although more powerful 16- and even 32-bit chips will be available soon, none have multi-threading and other powerful features that are common in standard computers. Memory sizes range from as little as 1K of programmable non-volatile memory to as much as 24K, with larger memory chips coming soon. ROM size is similarly limited. However large memory may become, the total amount will always be relatively limited compared to normal computer capabilities. That imposes the requirement of strict discipline in coding and limits the defensive measures that can be implemented.

4.3.3 Programming Languages:

Most SmartCards are currently programmed in low-level languages based on proprietary SmartCard operating systems. Some of the programming has been done in the chip's native instruction set (generally Motorola 6805, Intel 8051, or Hitachi H8). This result in highly efficient code but it is much more difficult to program than higher level languages. The number of programmers who could do this type of programming is quite limited.

 

4.4 Mondex Electronic Cash

Mondex is a payment system, based on smart card technology, which offers an alternative to paying cash for goods and services. With Mondex electronic cash, monetary value is stored as electronic information on a microchip, rather than as physical notes and coins. Mondex uniquely combines high security, person-to-person payment functionality, immediate value transfer, and multi-currency capability.

(Detail will be published later)

4.5 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.

Mondex can be utilized across multiple channels, including the Internet. As all payment is conducted chip to chip, all that is needed is a card, and a reader.

4.5.1 Fees and  Costs

An Originator must set up the credit card equivalent role of a central issuer for notes and coins to establish the non-cleared MONDEX scheme. Merchant installation costs are roughly equivalent to those required in setting up credit card acceptance services. If merchants aren't already SmartCard capable, they'll need to install readers and systems to communicate with their member to deposit the cash receipts. Also, there may be some additional one-time costs to purchase the additional readers needed to hold the Merchant MONDEX cards that are needed to store exchanged values. Cardholders pay nothing for cards from issuing members of the scheme.

 

(Detail will be published later)

4.6 Benefits of Mondex

4.6.1 Consumer Benefits

Consumers benefit from MONDEX in these five ways:

·         Security -

·         Convenience -

·         Flexibility -

·         International -

·         Control - 

 

(Detail will be published later)

4.6.2 Merchant benefits

Merchants can benefit from MONDEX in these five ways:

·         Efficiency -

·         Adaptability -

·         Solves problems -

·         Compatible -

·         Reduces costs -

(Detail will be published later)

4.7 Conclusion

MONDEX is an excellent choice as an alternative to cash, yielding all the advantages and eliminating many of the drawbacks from carrying around cash. As the MONDEX scheme proliferates across the globe consumers, and especially business travelers, stand the most to gain.

1. http://www.mondex.com/
2. http://bscitinnepal.blogspot.com/

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Group Members;

Lasang Jimba Tamang

Rojina Maharjan

Subash Poudyal

Ujjwal Panthi
VK Pandey

(07 BSc CSIT batch)

(Detail will be published later)