The Royal Canadian Mint has been busy developing a new digital currency system called MintChip, which is demonstrated at the 2014 National Retail Federation Annual Convention and Expo in New York City last week.
With MintChip, customers can use their mobile phones at Ingenico point-of-sale (POS) terminals, or transfer money to each other via text message or email. It can even be used online for small transactions, such as music purchases.
For security reasons, it can only be used for transactions of $10 or less, such as coffee or fast food purchases.
Other projects of this kind, such as Mondex, have been attempted in the past without much success. But Marc Brule, Chief Emerging Payments Officer at the Royal Canadian Mint, thinks that because of new and emerging technologies, people will be more likely to embrace MintChip.
“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.”
But what of debit and credit cards, many of which can now be used at POS terminals with a simple tap? Brule says he considers MintChip should 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.
Though MintChip is still in development, the Mint has plans to roll out a pilot phase for Mint employees. Ingenico POS terminals will be used in the cafeteria at the Mint’s Winnipeg and Ottawa locations, where staff will be encouraged to use their MintChips. After that, the pilot will be expanded to include third-party brokers, merchants, and some consumers.
As for widespread consumer use?
“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,” said Brule.