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Sunday, February 02, 2003

Cashless in France?

No, this is not a piece about an impending crunch to be produced by the growth and stability pact, it's about something positive for a change. A new French initiative to introduce a smart card that does away with the need to carry cash. Funnily enough this seems to be one of the areas where Europeans may actually have the possibility to steal a march on the US, especially if the quantity of Americans who still seem to pay their monthly and quarterly bills using cheques is anything to go by.

France is leaping toward a cashless future with a nationwide launch this year of computerized ``smart cards,'' a concept that has so far failed to entice many American, British and German consumers. The chief idea behind this new breed of microchip-embedded plastic is simple -- to dispense with pocket change and speed smaller transactions.Dubbed ``Moneo,'' the French electronic purse cards were introduced two years ago in a handful of small regions. In November, the service expanded to include Paris. Some 850,000 consumers now regularly use Moneo cards at 80,000 grocery shops, parking lots or vending machines, says Pierre Fersztand, chief executive of BMS, the technology company that launched the project. Because the basic Moneo card is anonymous, there are no privacy or identity theft concerns. But if an owner loses his or her smart card the cash that's stored onboard can be used by whoever finds it -- which is why there's a 100-euro ($107) storage limit. Fersztand expects the cards to be available to merchants and customers nationwide by the end of the year. ``We're not worried about whether it will take off here,'' he said in an interview at the company's Paris headquarters. ``The question is how long will it take -- two or 10 years?''

Among the challenges: how to ensure the cards are widely accepted, quick to use, easy to refill and carry low transaction fees for merchants. Banks generally charge between 0.4 and 0.9 percent per transaction, and consumers have to pay an annual fee between $6 and $13. So far, reaction is predictably mixed. Gregory Clau, 30, said only one customer has used the service since he installed it three months ago at his locksmith shop near the Champs-Elysees ``I don't think anybody is interested in it,'' he said. The dozen people a day who use Moneo to buy their baguettes and cakes at Chantal Plousseau's Paris bakery might disagree. ``More and more people are using it,'' said the 50-year-old Plousseau. ``It's efficient and eventually I will make less trips to and from the bank carrying bags of coins.'' At many parking meters in the Paris suburb of Boulogne Moneo is de rigueur -- the only acceptable method of payment. Authorities got fed up with gangs of youths tampering with the machines to get at the coins. "We all know that the future of money is completely virtual,'' said Torris, the Forrester analyst. `"Moneo is a first step toward that.''Try telling that to Christine Berube. She is refusing to offer the service at her tobacco counter in a dimly lit bar that serves up endless glasses of cheap table wine and cups of coffee to mostly elderly regulars. ``I think it's useless,'' the 46-year-old tobacconist said to nods of agreements from clients who draw heavily on their cigarettes. ``I know how to count change quickly and don't want to enrich the banks.''
Source: Silicon Valley.Com

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