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Citibank and Chase Manhattan have pulled the plugs on one of the largest electronic cash pilots to date, having failed dismally to generate significant enthusiasm from the public. The two banks issued 100,000 people with cards, but discovered that the users averaged an annual spend of less than $20. Heads are being scratched over the reasons for the failure of the experiment. It was confined to New York's Upper West Side Manhattan, so it may have been too limited in scope. Within the test area the vendors who installed it also generally took credit cards, so maybe here it was seen as an unnecessary duplication. And in stores such as newsagents that only take cash, the users tended to use cash rather than e-cash. What actually happened was that the experiment failed to achieve any kind of critical mass or mindshare early on, and then collapsed ignominiously as users and vendors both lost interest. But that doesn't mean, say the e-cash proponents, that such systems will never succeed. Simpler, more transparent mechanisms for loading cash onto the cards may help (most of the Manhattan users only loaded their card once), as may multi-function cards, incorporating credit, charge and e-commerce features. The banks may also have to change their pricing approach. Citibank and Chase wanted to charge users and vendors for using the cards, and though the fees were small, there was considerable resistance to this. It also makes it difficult to figure out why you would want to use one of these rather than an ordinary credit card. ® Click for more stories Click for story index

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