NatWest is teaming up with Midland and BT in the UK to develop Mondex. A pilot scheme in Swindon in 1995 could pave the way for UK customers to be using Mondex 'smartcards' by 1997.
Unlike credit or debit cards, they will contain a silicon chip that acts as a store of cash value.
The card can be 'recharged' from the customer's current account via bank ATMs and a new generation of BT telephones.
Proof of identity such as PIN numbers will not be needed as the card can be electronically locked and unlocked using a personal code. The card is inserted in the retailer's terminal and value is instantly transferred, with no signature or forms necessary.
Barclays says it has already piloted its own smartcard, although there are no current plans to take it forward.
NatWest is seeking more partners, in the UK and overseas. Visa UK, which co-ordinates the Visa system in Britain, plans to publish worldwide guidelines for smartcards early next year.
The Banking Insurance and Finance Union is worried that bank jobs may be threatened if cards do take over from cash. More than 40,000 of its 146,000 members handle cash. A Bifu spokesman said: 'It's another move by the banks to use technology to cut staff costs.'
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