Welcome to Mondex City

In Swindon, you can buy a newspaper with plastic. At least that's the theory, as Martin Whittaker discovered

Increasingly money comes and goes without you seeing it. In it comes, no longer by pay cheque but directly into your bank account. Then with telephone banking, direct debit and debit cards, out it goes again. There's still good old cash, of course. You can touch it, you know what you've got and at least everyone takes it. But now even cash has gone electronic.

A Mondex card looks like a credit card, but actually contains a small chip that can store data. You load it up with money from your bank account and when you buy something the cost is deducted from the total on the card.

Mondex is backed by Nat West, Midland and British Telecom, who claim it offers "a convenient alternative to cash". But does it?

Obtaining the card was easy enough, being a Nat West customer. If not I would have had to open a special service account with them, Midland or First Direct. The card came within days along with a small plastic "balance reader" on a key ring. Slot the card into the reader, and it displays how much "cash" is on the card.

At the Mondex Centre in a busy Swindon shopping mall, staff show you how to use the card. You can load it with cash at one of 20 cashpoints around town, or on one of hundreds of special BT payphones. There's a pin number for security and you can lock and unlock the card. But, lose it, and you lose the cash.

So, to a cashpoint. In went the card, tap in a pin number and in seconds the balance reader showed me there was now pounds 50 on it.

The first buy was a newspaper. At a corner news stand, Victoria News, an assistant took the card and popped it into a machine. A display showed the price: 40 pence.

All very easy - no rummaging for the correct change, though it did feel odd using plastic for such a small amount. And there was a compulsion to check the balance, what if I was electronically overcharged? But a quick look at the reader showed pounds 49.60 left.

"From a retailer's point of view it's very good," said news-stand manager Richard Jackson. "But less than one per cent of my actual customers use it. Lots of people get confused about what it actually is, they think it's a Switch card or a credit card."

In Debenhams cafe they took it too. But among a large queue for morning coffee, I was the only one paying by Mondex. Did many people use it here? "No, not really," said the lady on the cash register. "I wish they did, it would make everything a lot easier."

At a nearby indoor market I spied some Belgian chocolates, but horrors - the stall didn't take Mondex. Forced to dig out cash, I asked stallholder Pauline Dawson why she wouldn't take my card.

"I've only been in business three weeks but nobody's come in and asked me for Mondex," she explained. "I haven't got one. I don't want one either. I prefer cash. I know how much I've got, how much I've spent and what I've got left. I like to see my money."

She is not alone. In Beatties I picked up a couple of toys and put them on the counter. "Sorry, we don't take Mondex," said the lady on the till. "Somebody came round asking if we wanted it, but we weren't bothered to be honest." So back went the toys.

In Burton Menswear I picked up several pairs of socks. The sales assistant pulled a Mondex machine from under the counter and blew dust off it. It wasn't used much, she admitted.

Trying to buy lunch on Mondex was a sad affair. The Oven Door, a cafe a door down from the Mondex Centre didn't take it. Nor did the restaurant in the Wyvern Theatre. The Savoy, a big pub in the centre, took Access, Visa, Switch and Amex - but not Mondex. Increasingly hungry, I ended up in McDonalds. This seemed appropriate. Fast food - electronic cash; McDonalds - McMondex! The young lad behind the register informed me that his Mondex card had been taken away by the bank because he kept going overdrawn with it.

Despite all this, Mondex UK Ltd are quite bullish about what they claim is a success. They say some 70 per cent of the town's retailers take it, while there are currently around 10,000 card holders. "Mondex is beginning to replace cash, and to change people's spending habits," insists Ron Clark the company's Chief Executive. "Particularly in supermarkets, newsagents' kiosks, fast food outlets and public houses.

"Inevitably at such an early stage of a totally new concept there will be people in Swindon who aren't yet aware of what Mondex might do for them. But independent market research hasshown that the overwhelming majority of those who do use Mondex are very happy with it."

Perhaps I was unlucky. Rather than a convenient alternative as its backers suggest, I found shopping with a Mondex card frustrating . At the end of the day I felt nostalgic about good old fashioned notes and coins.

It begged this question - do we actually need an alternative to cash? Or is it simply a need the banks are trying to sell us? Although the Mondex card is free at the moment, from December 1997 they start charging pounds 1.50 a month for it. Surely that will be the real test.

Mondex is on trial in Swindon until 1997

Everything you need to know about Mondex

Mondex was invented in 1990 and announced to the public in December 1993. The following year it was voted the Most Innovative Smart Card Accomplishment of the Year at the European Smart card Applications and Technology Conference in Helsinki.

In July 1995 the pilot was launched in Swindon. Two months later it was introduced into the town's six main car parks, and a month after that Mondex compatible payphones were introduced. Last January it was introduced on all Swindon buses.

Swindon was chosen for the UK pilot because its population profile is representative of the UK in terms of age and social class. The town has over 1,000 retailers, some 700 take Mondex.

The upper limit on cash will be pounds 500 during the pilot scheme. Its backers say it will be possible to send money between countries over the phone, eliminating the fear of being stranded abroad without any currency.

Customers can obtain a Mondex Wallet, like a glorified calculator that can store money, load it onto a card, and keep a record of transactions. In addition there is a Mondex screen phone, which effectively gives consumers a cash machine at home.