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Why smart cards have failed: looking to consumer and merchant reactions to a new payment technology

Christopher R. Plouffe (PhD candidate in Marketing, Richard Ivey School of Business, University of Western Ontario, Canada)
Mark Vandenbosch (Associate Professor of Marketing, Richard Ivey School of Business, University of Western Ontario, Canada)
John Hulland (Associate Professor of Marketing and R.A. Barford Professor in Marketing Communication, Richard Ivey School of Business, University of Western Ontario, Canada)

International Journal of Bank Marketing

ISSN: 0265-2323

Article publication date: 1 June 2000

Abstract

For more than a decade, bankers and others outside the financial services community such as hardware manufacturers have sought to solidify the place of smart card technology as a viable retail point‐of‐sale alternative and, more boldly, as an outright replacement for cash in everyday consumption situations around the globe. Despite strong development efforts and numerous fact‐finding market trials, many banks have found smart card technology to be a losing proposition. This article presents a detailed case study of both consumer and merchant adoption of one smart card‐based retail point‐of‐sale system. The system, called “Exact”, was test marketed for a full year in the Canadian market. Various perceptual and demographic data from consumers as well as firm‐level data from retailers are both presented and assessed. The ensuing discussion offers pragmatic suggestions for those in the financial services community as to how the apparent difficulties and shortcomings of smart card technology may be overcome.

Keywords

Citation

Plouffe, C.R., Vandenbosch, M. and Hulland, J. (2000), "Why smart cards have failed: looking to consumer and merchant reactions to a new payment technology", International Journal of Bank Marketing, Vol. 18 No. 3, pp. 112-123. https://doi.org/10.1108/02652320010339662

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MCB UP Ltd

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