The universities of Exeter and York could become cashless institutions - not because of a lack of funding, but thanks to a "smart card" being trialled this academic year.

More than 11,000 staff and students at Exeter, and 1,600 first-year undergraduates at York, are pioneering the use of the University Card.

It incorporates the Mondex electronic payment system jointly developed by NatWest, Midland Bank and BT. The Exeter pilot is being run by NatWest, while Midland is responsible for the York trial.

Users can make cashless purchases at shops, bars, vending machines, photocopiers and pay phones on the campuses.

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The card was issued to freshers at Exeter on Friday last week and returning students on Monday as they registered. To encourage usage, NatWest pre-loaded each card with Pounds 2. York freshers collected their cards on Monday.

The card, which carries a student's number, photograph and a bar code means the end of separate cards for student guild/NUS membership, library borrowing, building access, and student elections and discounts. At York, the card will also give access to computing services. Users can add credit to their cards at loading points on campus. Those who hold accounts with the banks can use cash machines to transfer funds electronically.

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A Mondex balance reader issued with each card will allow users to monitor their spending.

Keith Monaghan, project manager for NatWest, said that Mondex was like cash because a PIN or signature was not required when making a purchase.

The University of York was an ideal environment to develop the multi-functional potential of Mondex, said Gerard Long, Midland's smart card development manager.

Graham Gilbert, director of finance at York, said the scheme would benefit students by giving them an all-in-one card and eliminating the need for loose change. Reducing the amount of cash circulating on campus was another advantage.

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Sir Geoffrey Holland, vice chancellor of the University of Exeter, said the Mondex system could revolutionalise day-to-day business on the campus and beyond.

The pilot projects follow NatWest's successful launch of Mondex in Swindon, where 12,000 cardholders now use the system in more than 700 retail outlets.