- The Washington Times - Monday, February 24, 2003

PARIS France is leaping toward a cashless future with the nationwide introduction this year of computerized "smart cards," a concept that has failed so far to entice many American, British or German consumers.
The 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-wallet cards were introduced two years ago in a handful of small regions. In November, the service was expanded to include Paris.
Some 850,000 consumers now regularly use Moneo cards at 80,000 grocery stores, parking lots or vending machines, said Pierre Fersztand, chief executive of BMS, the technology company that initiated 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 stored on it can be used by whoever finds it. To minimize losses, the card has a 100 euro ($107) storage limit.
Mr. 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?"
Every French bank has signed up for Moneo. All the major banks are shareholders in BMS, as are the French National Railways authority and the Paris mayor's office.
As in earlier experiments in New York and Britain, users can upload money from their bank accounts onto smart cards at teller machines in banks and post offices. They also can refill the "stored value" cards at any participating shop, supermarket, ticket booth or cinema, punching in a personal identification number as a security measure.
No PIN is required to dispense cash.
For those who don't want to carry more plastic in their wallets, Moneo can be incorporated into existing credit cards something that has not been tried outside of France. In fact, it already has been added automatically to 25 million credit cards up for renewal with the owners not always aware of it, Mr. Fersztand said.
"They have learned the lessons of past mistakes," said Therese Torris, senior analyst at Forrester Research. "We do think it has a chance to succeed [in France], whereas other initiatives had zero chance."
Among the challenges: ensuring the cards are widely accepted, quick to use, easy to refill and carry low transaction fees for merchants. Banks generally charge between 0.4 percent and 0.9 percent per transaction, and consumers pay an annual fee in the range of $6 to $13.
So far, reaction is mixed.
Gregory Clau, 30, said only one customer had 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 may disagree.
"More and more people are using it," said Mrs. Plousseau, 50. "It's efficient, and eventually I will make fewer trips to and from the bank carrying bags of coins."
At many parking meters in the Paris suburb of Boulogne, Moneo is the only acceptable method of payment. Authorities became fed up with gangs of youths tampering with the machines to get to the coins.
Smart cards have seemed to be perpetually on trial.
An experiment in New York City in 1998 failed because of system glitches. Merchants complained about allocating precious counter space to the card reader, and consumers lost interest without a financial incentive such as rewards.
Perhaps more important, the system wasn't profitable for the issuers, and banks couldn't charge for the cards' use until consumers and retailers were willing to pay for the convenience.
The few successful smart-card trials have occurred in controlled settings, like university campuses or with the U.S. military, where they serve as far more than electronic wallets.
Many U.S. and British students use them to buy food or drinks at college cafeterias and bars, gain access to buildings and computer files, or check books out of the library. Smart cards also serve as digital IDs for U.S. soldiers, authenticating them on computer networks, among other uses.
In Japan, 650,000 electronic purses known as "Edy" cards are in circulation and can be used at 2,100 stores, mainly in the Tokyo area. These non-contact smart cards can be used for identification, door access or as cash wallets, but unlike the French Moneo, they can be refilled only at special machines or using gadgets that hook up to personal computers.
Mr. Fersztand said the French, like many people, enjoy the jingle of coins in their pockets. But he hopes to offer an alternative, not a replacement.
"We all know that the future of money is completely virtual," said Miss 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 endless glasses of cheap table wine and cups of coffee to mostly elderly regulars.
"I think it's useless," said Mrs. Berube, 46, to nods of agreement from clients who draw heavily on their cigarettes. "I know how to count change quickly and don't want to enrich the banks."

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