Toronto Dominion Bank and Bank of Montreal have announced plans to test a smart card program called Exact.
For a yearlong pilot scheduled to begin in early fall, the Canadian banks said they will use Proton, the stored-value card technology developed by the Banksys association in Belgium.
The reloadable cards will be issued to bank customers in Kingston, Ontario, a city of 25,000 people with three universities and colleges.
The big student population should provide a good target audience, said Steve Phillips, Toronto Dominion's manager of access cards and smart card development. The banks estimate 20,000 cardholders will participate, with access to 800 terminals.
Exact will run concurrently with another smart card venture: Royal Bank of Canada and Canadian Imperial Bank of Commerce are closing in on their September launch date for Mondex, the electronic cash system developed by National Westminster Bank PLC of London.
Mr. Phillips said his bank and Bank of Montreal had invited other banks to join Exact, but none did. He is hopeful that after the test, others will be convinced.
"This is a first step," said Mr. Phillips, adding that the banks' ambition is to extend the technology "to all Canadians."
Benjamin Miller, chairman of Cardtech/Securtech, a Rockville, Md., company that runs a major smart card conference, called Exact "one of a variety of significant tests" that are expected to precede large-scale rollouts.
Mondex, which will be tested in Guelph, Ontario, is a broader program, with international aspirations, Mr. Phillips said. Exact is designed for domestic use on small-value transactions.
Another program, Visa Cash, is being tested in Toronto, Vancouver, and Quebec by Les Caisses Desjardins, Scotiabank, Toronto Dominion, and Vancouver City Savings and Credit Union.
The Exact chip cards will only be issued to bank customers, but will not be directly linked to checking accounts. Value can be added to the cards through 80 specialized devices, not at automated teller machines.
Bell Canada, a supplier and marketing partner, may modify public telephones and deploy screen phones in the homes of cardholders, where they could also load their cards.
Cardholders will pay annual fees of $6 to $12 as well as small reloading fees. Merchants will lease terminals and pay transaction fees, but these details have not been worked out.
