Bell Canada will offer micropayment services to its enterprise IP network customers through a partnership with fledgling Canadian firm Dexit.

Under the terms of an

agreement announced Thursday, Bell will have exclusive rights to market and deploy the Dexit service, which uses radio frequency identification (RFID) technology to process the payment of items under $20, to its enterprise merchant customers. Dexit, which launched last September, has been going after those same merchants, primarily within the downtown Toronto core.

Dexit issues consumers a small RFID tag on which they can load funds for $1.50 and swipe at merchants who have installed a tag reader to pay for small purchases. Merchants are charged an account fee in a manner similar to debit card transactions. Funds can be loaded through any Canadian bank, and the tags can be carried by themselves or on Telus mobile phones. Users have the option to be notified when the account is running low by e-mail, voice mail or fax, or by checking online immediately following a purchase. So far the company says it has signed up 225 merchants and 25,000 consumers.

“”(Bell) has such marketing appeal in regards to getting the tag into their customers’ hands,”” said Toronto-based Dexit president Renah Persofsky. “”For Dexit, the real benefit is that we’re going to have mass deployment of merchant and mass deployment of consumers, and that’s what you need to have a payment system like this become so huge.””

Bell Canada senior vice-president of marketing for enterprise markets John Hall said Dexit and the carrier would share the responsibility of deploying the readers. The service would appeal to many of its customers, he said.

“”They really face the challenge of how to handle cash and process cash,”” he said. “”This is an opportunity for them to minimize or reduce that amount of cash and get some of the savings from doing that. As well as making it simpler for their customers to interact with them.””

Many technology firms have tried to enter the micropayment space, given that Canada conducts $60 billion in cash transactions each year. Persofsky said the average credit transaction is about $100 and the average debit card purchase about $43, while Dexit users make an average purchase of $3.88.

“”With other things that have been on the market, if you lost it, you lost your money,”” she said. “”If you lose your Dexit tag, you call a 1-800 number and your money is safe.””

Although Bell Canada will have exclusive rights on merchant deployment, Telus Mobility, National Bank and TD are also issuers of the service.

“”Dexit has been piloting, so the system’s operational,”” Hall said. “”We did a pretty detailed review of the whole operation, and we were comfortable that it was appropriate for us to serve our customers with it.””

The immediate plan is to broaden Dexit’s reach beyond downtown Toronto to the rest of the 416 and 905 area codes.

“”As soon as we’ve got the right level and critical mass in adoption we’ll also start tackling the other market,”” he said. “”We’ll also be driven by our customers’ excitement, and many of them are nationals.””

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