Together with its partner Ingenico, the Mint demoed its innovation – which is currently in R&D phase – at the 2014 National Retail Federation Annual Convention and Expo in New York City this week.
The way it works is simple: customers can use MintChip with their mobile phones at Ingenico point-of-sale (POS) terminals, or transfer money with a text message or email. It can even be used online for small transactions, such as music purchases.
Currently, it is meant for use in transactions of $10 or less, such as coffee or fast food purchases, or for transferring money to other individuals.
Other projects of this kind have been attempted before without much success. Mondex, another smart card electronic cash system, was developed in the 1990s, but failed to catch on with consumers.
But Marc Brule, Chief Emerging Payments Officer at the Royal Canadian Mint, thinks MintChip is different from the rest.
“Mondex was a little bit before its time,” said Brule. “Mondex was in the early to mid 90s. The Internet was just beginning. The technology wasn’t what it is today, to make that kind of product successful. I think the smartphone is a game changer.”
“The terminals that were widely deployed at the time of Mondex weren’t NFC-enabled,” added Suzan Denoncourt, VP, market development, Canada, Ingenico. “That would have been one of the limitations, whereas we started deploying NFC-enabled devices about four years ago…so the prevalence of units – terminals – capable of taking an NFC transaction is nothing like what it would have been at that time.”
But what of debit and credit cards, many of which can now be used at POS terminals with a simple tap? Brule stressed that MintChip should be thought of as a complement to current payment methods rather than a potential replacement.
“It’s another choice factor for the consumer, and something cost-effective for the merchant,” Brule said.
The next step for MintChip is a pilot phase for Mint employees. Ingenico POS terminals will be used in the cafeteria at the Mint’s Winnipeg and Ottawa locations, and Mint staff will be encouraged to try using MintChip online as well. After that, the pilot will be expanded to include third-party brokers, merchants, and some consumers.
As for widespread consumer use? Brule isn’t certain.
“We’re having discussions with stakeholders in the payment industry, as well as our shareholder, the Government of Canada, as to what might be next steps,” he said.
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