memorandum

to: Jack cook

from: Liying wu

subject: Article review 3

date: 1/10/2005

Source Citation:

Ives, Blake. & Earl, Michael. (2001). Mondex International: Reengineering Money. Retrieved January 1, 2005, from London Business School Website: http://projects.bus.lsu.edu/cases/mondex/mondex.html

Summary:

This article is about a special smart card developed by Mondex International Ltd. In five years, Mondex Electronic Purse has grown from an idea to a global alternative to cash. The article focuses the establishment of Mondex International Ltd. and how it has built an Internet based payment – Mondex Electronic Purse. This smart card is different from the credit card or debit card that involves money being lent by the financial institutions or retrieved from an account. The Mondex purse is self-standing and requires no remote approval of individual transactions. Since the majority of transactions $10 or less are done by cash, the Mondex purse has the most significant advantages for such small transactions. The Mondex purse is safer than cash because it has developed a unique feature that allows cardholders to lock the value on the card with a personal number.

Research Questions:

1. What is Mondex Electronic Purse?

Outline Ideas:

1. Advantages of Mondex Electronic Purse

2. Disadvantages of Mondex Electronic Purse

3. What is the potential market for Mondex International Ltd.?

4. What are the major barriers?

Direct Quotes & Paraphrases:

1. “Mondex value equivalent to cash was stored in the card's microchip as were secure programs for manipulating that value and for interfacing with other Mondex cards or terminals.”

2. “We (Mondex) were looking for the next paradigm shift in banking…. We eventually concluded that the answer was RSA cryptography in a smart card, with no settlement for individual transactions.”