Sherbrooke, Que., is going cashless, Mondex Canada announced Wednesday.
The municipality will be the second to implement the Mondex e-cash system. More than 12,000 cardholders and 560 merchants have participated in trial testing in Guelph, Ont., where $2 million in e-cash has been issued since the trial began on Feb. 25, 1997.
With Mondex e-cash, cardholders can pay for even the smallest purchase, such as a chocolate bar, without having to rummage through pockets for the correct amount. "You don't have to worry about change", said Eileen Chadnick, spokesperson for Mondex Canada. "It is meant to be a cash alternative."
The card, available at financial institutions, is embedded with a micro-computer chip, which stores the electronic cash value and makes exact payments instantly at participating merchants without the authorization needed for debit cards.
About 90 per cent of merchants in Guelph are using Mondex, Chadnick said. Cards can be used to pay for restaurant and supermarket bills, fast food, bus fares, telephone cards and even parking meters. You can also pay person to person, "so if you owe a friend some money for a gift that you chipped in for, you can transfer the value from card to card", she said. When the value on the card has run out, it can be reloaded at Mondex-compatible ATMs or over the phone.
By expanding into Sherbrooke, about 150 kilometers east of Montreal with a population of about 120,000, Mondex hopes to break into the Quebec market, which took to debit cards early on.
"Sherbrooke is very supportive of new technologies", said Chadnick, "and the community is an excellent mix of business and consumers, similar to Guelph."
The Mondex card may still have some stiff competition from debit cards, despite the debit cards' need for authorization before payment. Canadians set a record high in debit card use in 1997, swiping their Interac debit payment cards 48.4 per cent more than the year before, the Interac Association announced in February. More than one billion debit card purchases were made and about 54,000 new retailers adopted the payment method, bringing the total number of participating merchants across the country to 235,000.
The Mondex card is not supposed to replace Interac, but to complement it, Chadnick pointed out. Vendors who accept cash for small purchases, such as gas stations and bookstores, are more likely to participate than high-end stores that sell furniture and jewelry, she said.
The system is expected to be in place by 1999, she said. The company plans to launch Mondex e-cash in Kingston, Ont. later this year.