How many customers are willing to stand in line at a kiosk to load e-cash to their cards? Or new programs or even promotional offers? How many will want to do the same thing at their home PC? The whole idea might make sense to smart card experts, but not to consumers. Smart card experts like to think of multiapplication chip cards as PCs, with the same capability of being able to load new programs for new features after the card has already been issued. But consumers don’t look at cards that way.
The Mondex, VisaCash and Proton electronic purse projects all failed essentially because it was too much of a hassle for people to reload money to their cards, without enough benefit in exchange. Then there’s the Target smart card deployment in the US, another example of creating a little too much hassle for consumers, and not quite enough benefit. People had to find a kiosk in the store to download coupons on their chip card, then go shopping. Finding the kiosk was difficult. And the offers were no better than what most people could find in the Sunday paper. People couldn't be bothered. The project failed.
Here’s what Business 2.0 Magazine had to say, in an article titled Target's Not-So-Smart Cards: The discount retailer could have been the ideal place to introduce chip-enabled credit cards--if it hadn't rung up so many dumb mistakes.
“While Frequent-Shopper perks were the Target card's main selling point, the loyalty capabilities were too complicated. In an industry where a 1 percent response rate to a newspaper coupon is considered high, technology works only if it makes coupon use effortless. In Target's case, though, technology made obtaining discounts more difficult. Shoppers had to order a special card reader from Target, then install the peripheral on their home computers and use it to download coupons to the cards. Or cardholders could obtain discounts at in-store kiosks tucked near customer service desks. Not surprisingly, neither harried parents--39 percent of Target customers have young children--nor tech neophytes gave the kiosks or balky peripherals more than limited use.”
An estimated $50 million was spent developing and rolling out the program. Coupon kiosks were installed at 1,191 stores, 37,000 cash registers were upgraded with fancy top of the line ATM-like POS terminals from IBM, and 9 million high end multiplication cards were issues, worth $3 each, when a simple $1 card would probably have worked just fine.