Easier than cash, faster than debit
DEXIT the company
Concept – Technology and Benefits
Company concerns and the final decisions
Target market
Dexit the company
Formed as new company in 2001
Started as private, became public in 2004
Bell Canada as partner in 2004
Get a stake in Canada’s low-value cash transactions
Deciding how and who to target with their service
Before/After approach
Concept and Technology
To provide easy & fast payment through RFID technology
Over the counter small cash payments.
Tags held by consumers
Readers on merchants counters
Wireless link between reader and tag
Withdraw money from consumers Dexit account
Benefits for merchants
Lower cash-handling costs (both theft and shrinkage)
Reduce line-ups
Turn walk-aways into customers
Reduced need to check for counterfeit money
Benefits for consumers
Faster than credit cards
No more messing with coins
Can track their transactions online
Two prior attempts had shown an interest from both consumers and
Mondex and Scotiabank
Canadians among the world’s heaviest users of electronic payment systems
350,000 retailers in Canada accepted payment via IDP in 2001
17,6 million monthly IDP users were counted in Canada in 2001
IDP: Interac Direct Payment
Interac Direct Payment Transactions by Province
(in millions)
Ontario (ON), Quebec (PQ) and British Columbia (BC) top three markets
Toronto (ON) Accounting for close to 30% of their province’s respective debit transaction market.
Retailers that issued their own proprietary payment cards or gift cards
Credit and Debit card issuers
More towards Dexit than Dexit is towards them
ExxonMobil Speedpass (1997) and Oyster (the new and developed)
Both using RFID
Company concerns and the final decisions
Product - Thoughts
Confident on using RFID
Consumers too accustomed to using cards?
Key chain fob or other kind of gadget?
Product - Decision
Target market - Thoughts
Target national or in a specific geographic area?
Target group of individuals who were comfortable with newer technologies
(Like the Dexit tag)?
Who where the heavy users?
Better for low-value transactions
Target merchants based on the demographics and lifestyles of the
Target market - Decision
Small target area within Toronto
Targeting areas with a high consumer-to-merchant ratio
College campus’
Subway stations
office towers
Various take-away food and convenient shops
Target a younger consumer base (students)
“Pendlers” on their way to work (potential heavy users)?
Should they have target another area/group?
Public transportation
Revenue model - Before launch
Decision for finding revenue
Transaction fee and how much?
Set subscription fee?
Fee for each transaction?
Willing to pay if cost is transparent?
Revenue model - Solution
Fees from merchants, based on a percentage of the transaction value.
Consumers pay 1.5$ each time they allocate new funds to the Dexit
Licensing fees from organizations (royalties).
Interest rates on prepaid accounts
Income from sales of Dexit point-of-sale terminals, RFID tags/readers
Partners in crime
In mid 2004 Dexit partnered with Bell
Bell have exclusive rights to market and sell in Canada
Getting access to Bells relations to 500.000 merchants
and 15 mill. customers.
Leads to lower marketing costs:
Sales and Marketing costs having gone from almost 1.5 million$
in Q2 2004 to less than 600.000$ in Q2 2005)
Licensing of system to other organizations
Promotion - Before launch
Limited marketing budget
Push or pull?
Posters, TV, radio, newspaper, Webpage
Hire sales force?
Promotion - Solution
Posters in the geographical area of service
Subway station, side of busses.
Special offers using Dexit’s webpage
Marketing surveys for existing customers
Ineffective webpage (show the bugger)
SWOT - Not Forgot
 Reliable system
 Propriety system
 B2B and B2C target market
 Bell (strong partner)
 Fast transactions
 High entry cost
 Webpage not consumer-centric
 High consumer acquisition cost
 Expensive hardware for
 High entry cost
 Licensing of system (Royalties)
 Possibility to port the system to
online sales
 Profit by substitute the cash
market with e-cash so big
competitors don’t see it as a
threat – Investors
 Adoption conservatism (Like
Euro in DK)
 New entries
 Not yet reached critical mass
(lack of awareness)
 Other technologies (mobile
Wrap - Up
The status of Dexit, today, is still uncertain.
Only gained 20.000 consumers over the last 2 years
Only gained 460 new merchants since launch
Many investors
Their license agreements with Bell
First-mover advantage in Canada
Will they survive on the market?
Have they done it right?
Thank you for your time