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SCMP Reporter

Hongkong Bank will have no privileges over other banks when issuing Mondex cards, the bank's marketing and planning senior executive, Eric Tai, says.

  His comments follow a recent agreement to resolve the controversy over the ownership of the Mondex franchise in Asia.

  Under the arrangement, MasterCard and HSBC Holdings will create a 51:49 joint venture called Mondex Asia.

  HSBC Holdings - the owner of the Mondex franchise in Asia - will give a franchise right to Mondex Asia, allowing it to market and distribute Mondex products to banks in the region.

  Thereafter, regional banks - including Hongkong Bank itself - will need to sign a contract with Mondex Asia before they can launch Mondex products, and will have to comply with the same regulations regarding the development of smart-card products.

  'Hongkong Bank will be treated on the same footing with other banks when it comes to issuing Mondex card products,' Mr Tai said.

  'Managing card brands, in fact, is not something we are best at.

  'We would rather focus more on our card operations and generate more business volume.'    The apparent conflict of interest of HSBC holdings in the Mondex project - simultaneously the brand owner and a competitor with other institutions - has not been a serious concern for banks that wish to join.

  Citibank's general manager for card products, Sunny Cheung, said that, as a card issuer, he only cared how much Mondex Asia charged banks to join the club, and how much the smart-card company charged to process one transaction.

  'We cannot work out a business case to assess the commercial viability of participating in the Mondex project until they give us precise numbers,' he said.

  Another prime consideration was the choice of automatic teller machine (ATM) network to reload Mondex cards' cash values.

   Mondex cards can have their cash values reloaded through selected ATMs in the ETC network - which opens to Hongkong Bank and Hang Seng Bank only.

  Most banks in the territory are members of the Joint Electronic Teller Services, which operates the territory's largest ATM network - Jetco.

  Mr Cheung said Jetco might find it difficult to open its network to Mondex because it had signed with Visa International to provide a reloading facility for the rival Visa Cash.

  He said even Visa International, which claimed it would launch reloadable Visa Cash in the second quarter, had not yet provided entrance fee and transaction charge projections for banks wishing to take part.

  Mr Cheung said Hong Kong banks were in no hurry to migrate to the smart-card age.

  'It is a long term development with far-reaching implications,' he said.

  'We will not be disadvantaged if we join one or two years later than others.' 



HSBC gets no region privileges in Mondex