[5] Mondex: Not So Private After All

A British agency in charge of consumer protection has begun a formal investigation of Mondex, a company that offers smart card-based payment systems, for allegedly falsely advertising that transactions under its system were anonymous.

In promotional materials, Mondex had claimed that the transactions were "just like cash." In reality, each card used in the system has a 16 digit identifying number which is captured by the merchant and transmitted to the bank each day. The merchants readers can retain up to 500 records at one time. Mondex's Swindon manager admitted in Network Week, a trade publication, that "we can certainly trace where cards have been used."

The case is being eagerly watched worldwide by banks because of its implications on the use of the term "digital cash" will have Europe wide effect.

The investigation began after Simon Davies, a Law Fellow at the University of Essex and Director General of Privacy International, filed a complaint. A copy of the letter is available at the Privacy International Web page at:

http://www.privacy.org/pi/activities/mondex/complaint.txt