E-Money Expected To Wipe Out Cash In Europe
(03/23/98; 5:32 p.m. EST)
By Andrew Craig, TechWeb
HANNOVER, Germany -- Cash will be
wiped out in Europe and replaced with
electronic cash cards within the next three
years, according to a senior executive at
German technology company
Siemens-Nixdorf.
The introduction of the Euro, the new
pan-European currency being launched on
Jan. 1, 1999, will "wipe out cash," said Peter
Page, chief technology officer at
Siemens-Nixdorf, speaking during the CeBit
'98 technology show here on Friday.
The replacement of cash with e-money will
be repeated in the United States and in the
Asia-Pacific region, but will lag behind
Europe, Page said. In the United States, the
adoption of e-cash will be driven by the
country's widespread usage of the Internet
for making purchases.
Europe has already taken the lead in smart
card adoption, Page said. "Technically on
smart cards, [U.S. companies] already lag
behind," Page said. In the United States, the
use of magnetic stripe cards is far too strong
to replace it with smart cards, he said.
The Euro will lead to so much confusion
among consumers using two currencies that
people will want to move to e-money, Page
said. The Euro will trigger people to get
serious about e-cash and decide "now is the
time, let's do it," he said.
Some analysts say, however, that the Euro
will not have such a great effect on cash. "I
don't think it will be as drastic as that," said
Martha Bennett, vice president of research in
Europe at Giga Information Group. "A
considerable problem with the Euro is not the
handful of coins, but that customers will have
to get used to the mental switch, so they can
watch for hidden price rises," she said.
Furthermore, electronic money cards may
not be as successful with consumers as first
thought, Bennett said. "In the Netherlands,
where there are a lot of chip card
experiments, the current feedback suggests
that consumers are not enamored with them,
largely because they don't trust the
information stored on them," she said.
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