The ‘cashless society’ will arrive later than anticipated, and certainly later than some vendors would like. At a seminar on the future of the electronic purse in Amsterdam last week, Paris-based Bull Information Systems clearly signaled that it is ready for the e-cash revolution, even if the market isn’t. Barry Grisdale, Bull’s UK and Ireland CEO, admitted that the revolution will not happen for a further three years. But that was it in terms of downbeat messages from Bull.
Bull organized the conference to demonstrate that e-purse technology is already in widespread use, albeit largely in differnt pilot schemes currently running across Europe. Schlumberger systems has a trial of its contactless cards currently running in the transport systems of Madrid and Barcelona. There are already 24 million cards, whether credit or debit, in use in Holland, according to Anton Kuijpers, director of Interpay, the association of Dutch banks which are commissioning Bull’s e-purses. That figure includes 11 million smartcards. The Dutch population is around 16 million.
Jerome Ajdenbaum, smart cards product manager for Bull, argued that hard cash is increasingly being dematerialized. The e-purse is to be the coinage of the information age. He used the example of the 1998 commonwealth games in Kuala Lumpur, Malaysia to show the efficiency of the e-purse. Visitors to the games were given the opportunity to purchase smartcards of varying amounts, ensuring speed and ease of any small cash transactions. He also predicted that credit card fraud, a scourge of UK finance with 135m pounds ($218.1m) lost last year, would be decimated. Ajdenbaum claimed that as the use of smartcards in France doubled from 1987 to 1996, credit card fraud was reduced by 90%.
There are uncertainties however, over the take-up of the new technology. Perri 6, the bizarrely self-named senior research fellow at UK government think-tank Demos and fellow at Strathclyde University’s department of government, Scotland, doubted whether the cards are really used. At no stage in four seminars, he stressed, was the daily popularity of e-purses analyzed. Perri 6 warned of low median figures in the industry [a truer reflection of popular use of smartcards than mean average usuage] and said the only ones getting high utilization figures are the transport schemes.
Perri 6’s caveat was echoed by Wassenberg, who said: domestically, you need public transport joining functionality. Loyalty schemes, he said, are of secondary importance.
Ajdenbaum said that there was a mind-set to be converted, but that this was the next step in a global, historical continuum. He drew grandiose links, casting back to the first coins in Mesopotamia and referring to the introduction of paper currency substitutes. Grisdale also invoked progress, pronouncing that the forces propelling the smartcard are absolutely irresistible.
Irresistible maybe, but not in the short term, perhaps. According to Jos Wassenberg, director of Easychip, a Dutch company which installs extra applications on Bull’s electronic purses, it may take as much as for today’s developers to see a return on their investment. It seems electronic purses may not quite be the same thing as cash in hand for vendors just yet.
