Local startup Technocash has signed a multimillion-dollar deal with Australia Post to distribute an "alternative" electronic cash solution to youths, seniors and low income-earners.
Technocash is a "long-life electronic token" and payment alternative to credit or debit card cards for online transactions. It can be bought over the net, in-store and in any currency.
Australia Post will distribute a scratch version of the solution nationwide through 2700 outlets, releasing the product to market today.
Australia Post will claim an undisclosed proportion of a $2 transaction fee charged to all Technocash customers. Technocash has been negotiating the deal with Australia Post since December last year, company officials said.
Security levels on the product are scalable. Also, users need a password to access to the funds they store on Technocash, and can transfer ownership to third parties. However, they are not entitled to a refund if their details are hacked on or offline and their funds used, according to Raymond Pakalns, a director with Technocash.
Purchases may range from a minimum of $20 to a maximum of $1000. Membership is valid for three years. Customers can use Technocash at both bricks-and-mortar and online stores.
Pakalns was confident that uptake would be high among online merchants, as he said Technocash provided a non-fuss cheap system to install and operate compared to credit cards. Furthermore, he claimed 50 per cent of Australian consumers would be using "some form" of Technocash in the next six months.
Transaction volume would reach 100,000 million in the next few years, he said.
Pakalns denied the suggestion that the $2 transaction fee would deter uptake among Technocash's target market. "We don't have any monthly fees other than a transaction fee. We offer a transaction alternative to a market that doesn't have (a credit card)," he maintained.
Newsagents and retailers will sell a scratchie version of Technocash over the counter, allowing non-business-to-consumer customers to register themselves for a security number and password.
The company is forecasting slow sales over the next year, saying the "virtual cash" concept is yet to take off locally. "People take a while to latch on to new ideas," said Pakalns. However, he was certain the company's reputation as a "semi-financial services provider" would lend it some early credibility, predicting revenue would hit the $100 million mark in the next 18 months.
Technocash will partner with the Canberra Chamber of Commerce to target around 40 retailers in the region to resell its payment solutions, according to Pakalns. Business customers would make a 10 per cent profit margin by distributing Technocash products, a "conservative" estimate by his standards, he said.
Current enterprise customers include homeware e-tailer e-home.com.au and business software solutions group Delphi Information Systems.
Technocash has also set its sights on co-branding its scratchie product with Sanity, ChaosMusic and Dymocks.