Mechanics 101

The mechanics of the set-up were off, too, according to TD Bank's vice-president of merchant services Jeff van Duynhoven, who functioned during Dexit's time in the sun as vice-president of electronic banking and payments and sat on the Dexit board of directors. Said van Duynhoven: "The challenge was the POS - it was a separate device that sat at the merchant's checkout. They had to key into the POS and the Dexit terminal to get that transaction processed, so by the time you were charged, you're not seeing that throughput. It's a longer process for the merchant in addition to the rental charge for the terminal."

TD, who made TD-branded tags available through its Web site and offered them to its employees, weren't able to reach a satisfactory business deal, he said. van Duynhoven resigned from the board in 2005, and TD sold its share on the market once the company went public.

The National Bank of Canada was another Dexit partner. "It sounded exciting, so we did a small pilot with employees in downtown Toronto of two to three buildings," said manager for payment strategies and debit cards Carlos Martinez. But, again, it was the scaling-up that proved troublesome. Said Martinez: "We went back and forth in negotiations, but there was no demand for participation." Dexit also erred in taking on a lot themselves, according to Martinez: "They strongly believed they could do it all, both participating with the banks and competing against them. And usually a third party handles the merchant relationship and operates the terminals, which Dexit did itself."

It ain't money, honey

Then there was the fob itself. Said IDC Financial Insights analyst Rob Burbach: "The whole technology never caught on because Dexit never understood what consumers use cash for. It was touted as a replacement for cash, but with cash, you can borrow it, you can give it, but Dexit didn't seem that convenient."

van Duynhoven also pointed out the annoyance factor of having to reload a Dexit fob at a bank, which added yet another step to the process.

Burbach said, "You weren't taking something away - you were adding something when you're already juggling cellphones, keys, and wallets." Even the vendors' cardreader demands didn't mesh with what the customers truly wanted, said Persofsky. "The merchants wanted to own the real estate, and have the royalty paid to them directly, and have their own cards," she said. "They wanted value for their brand, rather than what consumers were looking for - consumers wanted only one card."