The National Post
Saturday, November 1, 1998

Old-fashioned cash outsmarts smart card

Mondex test ended

by Jonathan Gatehouse, jgatehouse@nationalpost.com and David Akin, dakin@nationalpost.com

Bold predictions of the death of cash have failed to come true in North America's first large-scale test of smart-card technology.

Mondex Canada cancelled its pilot project in Guelph, Ont., yesterday, effective Dec. 31.

A consortium of Canada's 10 largest deposit-taking institutions launched the ballyhooed and expensive pilot project in February 1997, but more than 18 months later there is little evidence that anyone is using it .

Joanne De Laurentis, Mondex Canada Association president, said the consortium is ready to move on. "We've got what we need from it. We want to validate what we've learned in a new market", she said.

Another pilot project will be implemented in Sherbrooke, Que., next year. That project, Ms. De Laurentis said, will likely combine debit card functions with the embedded cash of the Guelph project.

"One of our findings is that consumers are saying they are ready for a card that has more than one payment application on it."

In spite of the millions of dollars in equipment, advertising, and promotional offers Mondex and its banking partners lavished on the town, Guelph's 100,000 residents never seemed to find the product that convenient.

"If people thought it was worthwhile then they would have used it", said Gord Townsend, the manager of a downtown sports card store.

Mr. Townsend's dusty Mondex terminal has processed one transaction since the test run began. "It's just something that isn't needed, not with Visa, MasterCard, and direct debit."

Mondex said the 12,000 card holders in Guelph have used the service for more than $3-million in transactions so far.

Back in Guelph, though, it's hard to find anyone who will own up to having one of the cards.

"My card is sitting in the back of my dresser drawer", said Alyson King. "My bank had a promo -- use it three times and get $15 in credit. So I bought three packs of gum and then went out for a nice lunch. I haven't used it since."

Copyright © 1998 by The National Post. All Rights Reserved. Reprinted with permission.