Between 1997 and 2001, two mid-sized communities in Canada hosted North America's most comprehensive experiment to introduce electronic cash and, in the process, replace physical cash for casual, low value payments. The technology used was Mondex and its implementation was supported by all the country's major banks. It was launched with an extensive publicity campaign to promote Mondex not only in the domestic but also in the global market, for which the Canadian implementation was to serve as a 'showcase.'
However, soon after the start of the first field test it became apparent that the new technology did not work smoothly. On the contrary, it created a host of controversies, in areas as varied as computer security, consumer privacy and monetary policy. In the following years, few of these controversies could be resolved and Mondex could not be established as a widely used payment mechanism. In 2001, the experiment was finally terminated.
Using the concepts developed in recent Science and Technology Studies (STS) this article analyses these controversies as resulting from the difficulties of fitting electronic cash, a new socio-technical system, into the complex setting of the existing payment system. Implementing a new technology is seen as a long process in which social and technological actors are required to adapt to one another. In the Mondex case, such adaptation did not happened sufficiently to stabilize the socio-technical network as a whole. However, in some limited areas mutual adaptation did occur and there the Mondex experiment produced some surprising successes. In this perspective, the story of Mondex not only offers lessons on why technologies fail, but also offers insight how short-term failures can contribute to long-term transformations. This suggests the need to rethink the dichotomy of success and failure.
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