The Mondex smart card trial in Guelph, Canada, hit its one-year cardholder goal more than three months early.
Mondex Canada said last week that 10,000 cardholders had signed up in the Ontario university town, population 100,000, that the leading banks in the country chose as their initial showcase.
The stated goal was 8,000 to 10,000 cardholders at the one-year mark, February 1998.
Royal Bank of Canada and Canadian Imperial Bank of Commerce, the country's biggest banks and charter members of Mondex International, spent months laying groundwork for a smart card demonstration that would attract worldwide attention.
The banks put off a planned 1996 grand opening until Feb. 13, 1997, when most of the more than 500 merchants accepting the electronic cash alternative-90% of all Guelph retailers-had the necessary equipment installed.
The Mondex banks, working with Bell Canada and Northern Telecom, deployed 250 Mondex-compatible pay telephones as well as 2,500 card-reading screen telephones in homes, where customers can perform banking transactions and load cash on their cards.
Joining the two banks in September was Guelph & Wellington Credit Union Ltd., the first credit union in any Mondex program. By that time Credit Union Central of Canada had joined with virtually all the major Canadian banks and near-bank competitors in endorsing Mondex over the competing Visa Cash and Proton stored value systems.
The broader cast of characters is pushing toward a nationwide rollout by mid-1998 using the more advanced Multos operating system, which should make the Guelph program seem primitive by comparison. But bankers say they will come away with valuable marketing insights.
Besides reaching 10,000 cards, the test has also seen 1.5 million Canadian dollars ($1.1 million U.S.) loaded on the cards' chips. Point of sale transactions cannot be totted up because they are not centrally recorded, which is key to keeping the system economical enough to handle low-dollar payments.
Marlene Boyaner, vice president of stored value products at Canadian Imperial, said the cardholder response "is a great foundation to build on. We know from the introduction of other new technologies that there is a significant adoption period before consumers will incorporate it into everyday use. Therefore we are continuing marketing and education programs in Guelph."
Al Gale, vice president of stored value at Royal Bank, called the cardholder response "a very positive sign of the progress."
The Guelph team may have done a better job managing expectations than did National Westminster Bank and Midland Bank in the U.K. pilot. In Swindon, a city of similar size, they struggled amid bad press to reach 10,000 cards at the one-year mark in July 1996.
This year they surpassed 13,000.
With 16 programs in six countries, including a 25,000-card New York City test, Mondex is projecting production of one million cards by yearend 1997 and five million by yearend 1998.
