Aneace summarises the last presentation suggesting that cash is under-priced hence smart cards, and electronic purses / prepaid cards are not as successful as they could be.
Aneace’s Blog: A solution to the interchange dilemma
the only solution to the interchange problem is to raise the price of cash to match its cost, for example through an ATM charge
Aneace is right that this is a political and bank non-starter, because the secondary revolt would out-weigh the benefit.
Prepaid cards acceptance, and cash reduction, can only succeed, once someone figures out a better mousetrap.
Bankwatch 
The cash cost is huge and not just to banks who are spending at least a billion a year on the fixed and variable costs of handling and managing cash.
The federal treasury costs of printing cash and coin are high.
The foregone tax revenues of the informal economy which is driven off cash are massive – now there’s the really politically unpopular cost of cash to get rid of.
@Thomas … whats your take … should there be a charge introduced on cash?
Banks have been doing it already on the merchant side. Charging “deposit content” fees on the number of bills and coins deposited, and fees on cash/change withdrawn, the aim being to equalize some of the cash fees with actual costs and with interchange.
@Thomas … true, but consumers do not feel that pain, and they are the ones carrying cash around. I wonder what it would take for people to want to give cash up.
Heh and Indeed. We have now reached the point of the conversation where I can’t myself comment any further š
This here though is something in the public domain: http://origin.www.cbc.ca/news/background/tech/cellphones/payments.html
As a consumer, I don’t want to be charged anything to get at the money that I have already allowed you to hold onto. Period. That’s why people get so pissy about the ATM charges that already exist.
I’m going to pause there: most FIs already have ATM charges, enough of them so that NOT charging is a notable feature. Shouldn’t that be covering things?
I actually got a preloaded debit card for a family member not too long ago, and it was a complete disaster. She couldn’t use it to buy something on Amazon, and the fees seemed very high for dealing with fairly small amounts of money, especially for reloading. We’re going back to cash.
@elaine … this is a classic story. Everything associated with ATM’s and cards have all kinds of hidden fees, and it reduces consumers trust in such things.