Micropayments: what not to do 101

Ahead of its time or asinine?

Two years ago, Canadian contactless micropayment vendor Dexit was quietly morphed into the point-of-sale company HDX. No-one cared much.

But just a few years before, the tech sector was all abuzz over the possibility of paying for small-ticket items under $20 with its small RFID-enabled fob that could be pressed to a reader to pay, and then refilled at a bank for a couple of bucks.

Back in 2003, there were partners on board, including the big banks, who would allow users to refill their cards at their branches, and Telus, who stuck the tags on their phones. By 2004, there were 225 merchants on board, and 25,000 consumers signed up. That year, Bell Canada jumped at offering the service to its enterprise IP network customers; the following year, it announced that it would set up a biometrics-based telephone system to add value to Dexit fobs.

But by 2006, the company had slashed staff and started scaling back its downtown Toronto ops, even though it boasted of 450 merchants and 50,000 customers. The company was now public and hemorrhaging money, according to company founder Renah Persofsky, who now works for the Toronto office of Ubequity Capital.

Eventually, Persofsky stepped down, and Dexit became HDX under the rule of Paul Howell.

Now the Dexit offices are being leased out to save money, and HDX is almost back to profitability, according to Persofsky, who said that she is supportive of the direction of the Dexit brand under the HDX banner. HDX is projecting around $9-million in revenue for 2008, and recently acquired two other companies. But the business is more in general POS technologies, and its Dexit ops are nowhere near its glory days levels. It's left in exactly seven downtown Toronto locations, although there were new roll-outs of the Dexit Payment Solution with the HDX touch screen Point of Sale (POS) solution at Robin's Donuts in Nova Scotia, and the Manufacturers Technology Centre in Ontario in late 2007.

The Chicken and the D-eggs-it

"It was not surprising at all," said Info-Tech Research Group senior research analyst George Goodall.

Micropayment (or stored cash card) services and devices have a long history of failure going back to the late eighties, and unsuccessful attempts like the Visa Cash, Visa SuperSmart, MasterCash, and Mondex cards. "It's a game of scale, of cost structure. You have to scale up quickly," Goodall said. Targeting downtown Toronto for its primary roll-out meant that it was "only a matter of time."

Several people interviewed used the term the-chicken-and-the-egg. Said Goodall: "Without the vendors on board, there's no value for the customers. Without the customers, why would the vendors get involved?"

Probably the best example of a successful micropayment system is The Octopus, the Hong Kong Transit System. It utilizes a contactless stored-cash payment system. But, said Goodall, the key to its success lay in the humongous scale of the endeavour. "It's a massive transit system with huge usage," he said, "So they had a very rapid subscriber base, with almost 80 per cent of the population using it. It's hard to reach that critical mass."

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Briony Smith

ComputerWorld Canada
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Bitdefender 2019

This Holiday Season, protect yourself and your loved ones with the best. Buy now for Holiday Savings!

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?