TORONTO - The Royal Canadian Mint's ambition to launch a secure system to send and spend digital currency, nicknamed MintChip, has passed a new milestone.
While still in research and development mode, MintChip's first proof-of-concept implementation â€” an integration with a retail point-of-sale terminal made by Paris-based Ingenico â€” is being displayed this week at the National Retail Federation's annual convention in New York.
First launched in April 2012, just days after federal Finance Minister Jim Flaherty announced the penny's days were numbered, MintChip was introduced as a potential way for consumers to digitally exchange money in small denominations, in transactions of about $10 or less.
It could be used in place of cash to buy a coffee or fast food, and online it was envisioned to enable easy transactions for things like buying music, news articles, or add-ons for video games.
Consumers could use MintChip with a mobile device at a cash register or send money with a text message, email or potentially a social media message.
"We call it a digital cash-like product and we like to dub it as a product that's been architected for the 21st century," said Marc Brule, the Royal Canadian Mint's chief emerging payments officer.
"I think one of the target markets or demographics for a product like MintChip is the digital native, the millennials who grew up with the Internet and grew up with digital-type products.
"This will be just another arrow in their quiver in terms of ways of paying (for their purchases) that will be easy and fast."
Brule said the rise of BitCoin, a peer-to-peer digital currency system that's still in its infancy but gaining in popularity, has helped, not hurt, MintChip's chances of getting fully developed.
"I think it's raised the consciousness and awareness around digital currencies, virtual currencies, digital products, whatever you want to call them," he said.
"I think it's been very helpful to the MintChip proposition."
The eBay-owned digital platform PayPal has also grown in Canada since MintChip was first unveiled and now allows consumers to spend money in their accounts at e-commerce sites including Babies "R" Us, the Bay, Best Buy, Future Shop, Macy's, Saks Fifth Avenue, Sport Chek, the Shopping Channel and Toys "R" Us.
But Brule said he's not concerned with the competition that already exists for MintChip and new entrants that may emerge.
"We view MintChip as offering consumers some choice and we don't necessarily see it displacing any or all of the other products that are out there today," he said.
"I don't believe there's going to be one (digital cash product) that's going to conquer the world."
Brule said the next step for MintChip is further testing of the proof-of-concept implementation within the Royal Canadian Mint. External testing is expected to be launched later in the year, although he wouldn't say exactly where or when that would happen.
"It'll be in 2014 is our belief," he said.