Slashdot Mirror
In Canada, a Government-Backed Electronic Currency
An anonymous reader writes "Secure chips have already made it into our credit and debit cards. Next up, they could replace pocket change.The Royal Canadian Mint has been pushing forward with its "MintChip" prototype, a digital cash replacement aimed at transactions under $10, since it surfaced a year ago. The Crown corporation is factoring in developer feedback, hiring a product manager and consulting with the financial sector."
They have too normally via their contracts. If they object and you can report them.
If you want cash, you have to give me a discount greater than my card gives me. I am not here to make your store profitable.
Transaction fees. The policy for how this is handled varies from vendor to vendor, and some won't accept transactions below ten dollars at all. More obnoxiously, many put a 25 cent transaction fee on any direct bank debit (Interac) transaction under five dollars, and some will play with variations like 30 cents, or no limit, or something else. Supposedly this balances out the very small flat cost of all Interac transactions, but ultimately it means you're punished for using your card instead of coinage.
Otherwise, however, the debit system is quite successful, and some people can afford to not even have a credit card. If MintChip can genuinely avoid all transaction fees, it'll be the greatest thing since sliced bread for that alone.
Other goals of the system are account anonymity (a government building an anonymous financial system? say what?) and permitting arbitrary peer-to-peer transactions like PayPal... but with no intermediary. Unfortunately they have yet to figure out how to make people RTFA.
Bio questions? Ask me to start a Q&A journal. Computer analogies available for most topics!
The contracts also typically require you charge the same price for goods whether it be paid for by cash or credit. The cashback you get from your credit card at least partially comes from the fees the credit card provider charges. Most vendors already have their prices higher to cover the CC transaction costs A better argument might be is that it is a big economic inefficiency in the market to have a 3% transaction cost on purchases. The Canadian government is trying to remove this inefficiency.
If you want cash give me a better discount than my card does.
The CC companies specifically forbid this practice in the merchant agreement. Merchants cannot charge an additional fee for credit cards, and they cannot offer a discount for cash. Gas stations are normally exempted, and a few other low margin businesses may also be able to negotiate an exemption, but most shops are required to charge the same for cash and CCs, and just absorb the transaction fees as a cost of doing business.
Actually ALL of those card benefits you receive come straight out of the merchant's pocket. Airmiles, purchase points and cash back are all being extracted from the merchants in addition to the CC fees which can be as high as 5% or more. There's a reason businesses prefer cash and why Interac is so popular in Canada with merchants as their fees are considerably lower.
we have the Octopus card in Hong Kong which works for convenience stores, subway and other transportation fees, and some retailers like Starbucks or our local supermarkets. it can only be topped up to 500HKD($64.43USD) at any convenience store or subway station and is anonymous. it uses an RFID chip, so it doesn't need swiping, just place close to the machine will charge the card. same goes for Japan's Suica card, which was only for Tokyo before but has just gone national. having an electronic currency card is wonderful, instead of having to pocket so much change for those times u need to use the payphone or pay for a one time bus ticket or buy something from a vending machine. and it's not attached to my credit or debit card, so i can hand it to a relative or friend when they visit me in Hong Kong, or i can buy a Suica card in Japan and use it just for the duration of the trip without worrying about daily exchange rates.
After trying to get them to support Linux and even offering to do the development to get it to work with Linux they informed me that the hardware requires a binary blob and that Linux would never be supported.
Some other developer also found an easy way to pull money off the chip without permission using a bit javascript and I wasn't too impressed with the design and security.
There's a hard limit (1000?) transactions per chip so once you go over you need a new chip. I found that quite odd but maybe that's the limit to the amount of transactions this "anonymous" cash system can hold.
Listen to my music.