Danmønt

~ the last words ~

The prepaid card i actually carried in those years was a phone card, bought from a kiosk and spent in a payphone until the counter reached zero and the card was dead plastic. Danmønt was that idea taken national. One card for any small purchase, with no bank sitting in the middle of the transaction. Denmark was among the first countries in Europe to try it at that scale, and it is a useful grave precisely because the technology was fine and the thing died anyway.

The scheme was set up in 1991 by PBS, the Danish banks' payment company, together with the phone company KTAS, and the cards went into circulation from 1992 with national coverage arriving in 1993. You could buy one in a bank or at a post office. It worked in DSB ticket machines and payphones, later in laundromats and company canteens, which tells you exactly what it was for: the machine transactions where a cashier does not exist and coins are a nuisance for everybody.

It was a chip card years before chip cards were normal at the counter, and it carried a fixed amount that ran down as you used it. No credit and no PIN. Losing one was losing cash, which was the point rather than a flaw, because that is how the small-payment problem was understood at the time.

~ the record ~

~ why it did not take ~

A study out of Copenhagen Business School by Jan Damsgaard and Morten Hjelholt went back over it and found the failure was structural rather than technical. Copenhagen's transit authority pulled out before launch, which cut the founding capital from a planned hundred million kroner to eighty and removed one of the two places a Dane would have used the card every single day.

The rest was the shopkeeper's arithmetic. A retailer was being asked to install a second terminal next to the Dankort reader, and each Danmønt transaction cost twenty øre, so accepting it was more expensive than accepting the card everyone already had. Then the Dankort itself became normal for small amounts, and the researchers' verdict is the cleanest line anyone wrote about the scheme: Danmønt had turned into an annoying little brother of the Dankort. 7.3 million transactions in 1998 was as high as it ever got.

~ the actual end ~

PBS announced the closure at the end of may 2004 and gave the scheme eighteen months to wind down, with the final date set at 31 december 2005. Nils Hilbard, who ran payment cards at PBS, said the perspectives of having an electronic purse had not attracted enough merchants, and the limited user possibilities had limited Danish interest in carrying one. That is a corporate sentence, and it is also exactly right.

Nobody was left holding much. The cards were low-denomination by design, so the end of Danmønt cost the average Dane the price of a few cups of coffee at most.

~ the long tail ~

Every European country ran a version of this experiment and every one of them lost. Chipknip in the Netherlands held on until 2015 and Mondex went out in Taiwan in 2008, having started in Swindon. Proton in Belgium and Quick in Austria had the same shape and the same ending. The stored-value chip was engineered for a world where authorizing a fifty-cent payment against a central system was too slow and too expensive to bother with. That world lasted about ten years.

What killed the e-purse everywhere was not a better e-purse. It was the network getting fast and cheap enough that your ordinary card could just ask the bank, every time, for two kroner. Contactless payment is Danmønt's job description done by the card Danmønt was built to sit beside.

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