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AT&T, Mondex make small change

Internet World AT&T will begin testing the Mondex smart card scheme for Internet payments of $10 or less.

Internet World LOS ANGELES--AT&T (T) said today it will begin testing the Mondex smart card scheme for Internet payments of $10 or less.

The announcement with Mondex, which has emerged as a leader for smart card payments since MasterCard bought a controlling interest in the company last year, was the most significant of several AT&T Internet commerce announcements today at the Internet World trade show.

"Transaction costs make low-value Internet sales too expensive for merchants to accept using traditional payments methods like credit cards," said Keith Kendrick, an AT&T senior vice president for smart payments. "While Mondex also works for large transactions, it makes sales as low as a few cents commercially viable for merchants."

AT&T's Mondex announcement follows news yesterday that Digital Equipment (DEC), plans to bring payments of $5 to less than a penny to the Internet in its Millicent program.

While other Internet payment companies questioned whether there's a market for payments of under a penny, the AT&T smart card puts the phone giant in a space where virtually all Net payment vendors want to play. In a market of start-ups, AT&T's brand name could carry much weight.

Unlike most Net payment schemes, the Mondex system allows users to transfer payments directly from one party to another without routing payments through a central clearinghouse.

AT&T will integrate its Mondex initiative, which goes into testing this summer with selected online merchants, into its SecureBuy Web commerce service that includes Web site hosting and lets merchants conduct financial transactions over the Net. AT&T expects to introduce the Mondex payments in the first half of 1998.

SecureBuy uses Open Market's merchant software, and Hewlett-Packard will help implement AT&T's Mondex smart card trial with hardware, integration, and software. HP announced an ambitious program for smart cards as a security mechanism in large companies.

In other e-commerce developments today, AT&T also named Wells Fargo Bank, one of the most aggressive institutions in Internet banking, as its first partner in AT&T's Marketing Alliance Program. The program combines AT&T's Web site hosting and transaction service with Wells Fargo's merchant credit card processing.

Separately, AT&T announced a similar marketing pact with First USA Paymentech, the largest credit card processor for direct marketers, to promote AT&T's commerce and Web hosting to First USA's merchant customers.