Chipknip

» see chipknip.nl as it lived, on the wayback machine

~ the obit ~

Chipknip only existed if you banked in the Netherlands, which makes it about the most locally bounded thing on this site. I have never held a Dutch bank card. It is here because the idea underneath it, money that lives on the card rather than in an account somewhere else, was once the consensus plan for how small payments would work everywhere, and it lost so completely that it is difficult now to remember it was ever the plan at all.

The pilot ran in Arnhem from 26 october 1995 and the national rollout followed the year after. Within a few years the chip was simply present on every Dutch debit card, not as a product you signed up for but as a second thing the card could do. You put money onto it at a loading terminal using your PIN, and after that you spent it without one, up to a maximum of five hundred guilders and later five hundred euros.

It existed because of what card payments cost in 1996. A PIN debit transaction had to dial out, get an authorization and come back, which took time the shop did not want to spend on a two guilder purchase and cost a percentage the shop did not want to pay. Chipknip settled on the card itself in around two seconds with no network call and a flat fee. For anything under about ten guilders the arithmetic was not close.

~ the rap sheet ~

~ how it worked ~

The country then did the thing small countries occasionally do and built two of them. Postbank launched a rival purse called Chipper in 1996, with a slogan about the future having a Chipper in its pocket, and for five years the Netherlands ran two incompatible electronic wallets on cards issued by banks in the same street. Postbank gave up in 2001 and Chipper was merged into Chipknip. Interpay ran the scheme until 2005, when it passed to Currence and its licensee banks.

Where it actually lived was never the high street. Chipknip ended up in parking meters and vending machines, which in practice meant the ticket in the town square and the coffee machine on the third floor of the office. It was the payment method for the transaction too small for anybody to want a receipt, and by 2010 that added up to 178 million transactions in one year. What it never became was the way you bought your groceries.

~ what it became ~

The thing that killed it is that authorization got cheap. Once terminals were on permanent connections rather than dialing out, the two second advantage vanished, and contactless debit arrived doing the same job with the money still in your account and no loading trip at all. By march 2013 Chipknip was down to two percent of retail payments. Currence announced that month that it would disappear and gave the country almost two years of notice.

It stopped on 1 january 2015. What made the ending unusual is the last step: the Dutch had left real money on those chips, and the banks agreed to sweep the balances back into people's accounts automatically rather than keep them. Customers of the large banks got 82.5 million euros returned in the first quarter of 2015, an average of a few euros each, from a payment system that had already been switched off.

Every stored-value purse of that generation went the same way, Mondex in Britain and Danmont in Denmark included, for the same reason. The offline card made sense only while being offline was the normal condition of a shop. chipknip.nl is a domain auction listing now.

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