Chipknip (a

portmanteau A portmanteau word, or portmanteau (, ) is a blend of wordschip card'' and ''knip'', Dutch for purse) was a stored-value payment card system used in the

Netherlands ) , anthem = ( en, "William of Nassau") , image_map = , map_caption = , subdivision_type = Sovereign state , subdivision_name = Kingdom of the Netherlands , established_title = Before independence , established_date = Spanish Netherl ...

. Based on the Belgian Proton system, it was started by

Interpay Interpay Nederland B.V. was the Dutch payment processor and payment product provider from 1994 to 2006. Interpay owned PIN, Chipknip, and Incasso. In 2005, they spun off Currence and in 2006 they merged to form Equens. History Interpay wa ...

on October 26, 1995, as a

pilot project A pilot study, pilot project, pilot test, or pilot experiment is a small-scale preliminary study conducted to evaluate feasibility, duration, cost, adverse events, and improve upon the study design prior to performance of a full-scale research p ...

in the city of

Arnhem Arnhem ( or ; german: Arnheim; South Guelderish: ''Èrnem'') is a city and municipality situated in the eastern part of the Netherlands about 55 km south east of Utrecht. It is the capital of the province of Gelderland, located on both ban ...

and a year later rolled out countrywide. Chipknip was taken over by

Currence Currence is a Dutch association set up the banks that coordinates the payment systems in the Netherlands. Its aim is to "facilitate and provide market transparency while maintaining the quality and safety of the payment systems of the Netherlan ...

due to a

restructuring Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons ...

on May 17, 2005, who managed it with their licensees until its discontinuation on January 1, 2015. The Chipknip was primarily used for small retail transactions, as the card could contain a maximum value of 500 euros. The money needed to be transferred from a card holders main bank account using a loading station which were generally located next to ATMs. In 1996, The

Postbank Postbank or Post bank may refer to: Postal savings systems (alphabetical by country) * Bulgarian Postbank, a Bulgarian retail bank * Chunghwa Post, a Taiwanese postal service that provides savings account services * Deutsche Postbank, a German ret ...

left the Chipknip project and started the Chipper project with other organisations such as

PTT Telecom PTT may refer to: Chemistry and medicine * Partial thromboplastin time, a performance indicator in medicine for coagulation status * Photothermal Therapy, a medical treatment * 2β-propanoyl-3β-(4-tolyl)-tropane, a cocaine analogue * Polytrimethy ...

to compete with the Chipknip until 2001, when it merged into the Chipknip system. Its peak was in 2010, when a total of 178 million transactions were made. Since its discontinuation,

contactless payment Contactless payment systems are credit cards and debit cards, key fobs, smart cards, or other devices, including smartphones and other mobile devices, that use radio-frequency identification (RFID) or near-field communication (NFC, e.g. Samsung ...

s without pin code for small transactions using

Maestro Maestro (; from the Italian '' maestro'' , meaning "master" or "teacher") is an honorific title of respect (plural: maestros or maestri). The term is most commonly used in the context of Western classical music and opera, in line with the ubiqu ...

V Pay V Pay is a Single Euro Payments Area (SEPA) debit card for use in Europe, issued by Visa Europe. It uses the EMV chip and PIN system and may be co-branded with various national debit card schemes such as the German Girocard or Italy's PagoBan ...

have largely become the norm.

Background

In the early years of the

PIN A pin is a device used for fastening objects or material together. Pin or PIN may also refer to: Computers and technology * Personal identification number (PIN), to access a secured system ** PIN pad, a PIN entry device * PIN, a former Dutch ...

system, consumers were advised to pay small amounts with cash money and big amounts with PIN. Later, the cash was replaced by the Chipknip. BeaNet was founded in December 1988. On 1 July 1993, a merger between , BeaNet and Eurocard Nederland was announced, which formed Interpay B.V. in 1994.

Proton

The Proton system was designed by

Banksys Banksys N.V. (or Banksys SA) was a Belgian payment processor owned by Belgian banks. It was formed in 1989 through the merge of ATM/POS networks of Bancontact and Mister cash. It also developed the Proton system, which was later spun-off into ...

in 1994. It was licensed to banks in Switzerland, The Netherlands, Brazil, Australia, Sweden and Canada for their programs but used a different name for each of them. American Express got a worldwide license. Banksys invested around 1 billion

francs The franc is any of various units of currency. One franc is typically divided into 100 centimes. The name is said to derive from the Latin inscription ''francorum rex'' (King of the Franks) used on early French coins and until the 18th centu ...

in the development of Proton, which had paid off. Interpay avoided a significant investment by licensing the Proton system developed by Banksys. The Proton architecture is largely inspired by EN 1546, but the Proton protocol is proprietary.Sherif, Mostafa

Functioning

The Chipknip was a debit card that did require a pin code for payments. For depositing money onto the card, it did require a pin code. A maximum of 500 guilders or euros could be deposited onto the card.

Legal

Every payment product of Currence is put in a separate

besloten vennootschap A (, lit. " closed company"; formally a , , ) or (SRL) is the Dutch and Belgian version of a private limited liability company. The company is owned by shareholders; the company's shares are privately registered and not freely transferable. ...

company. They are all owners of the trademarks, copyrights and other properties. These companies are contract parties with license and certification holders and are responsible for providing a licenses to other companies.

Technology and security

In Phase I, the card manufacturer was CP8 Transac, a division of Groupe Bull. In June 1996, the choice for the CC1000 chips by Bull Benelux was made. In Phase II, the national roll-out starting in 1996, the card was manufactured by CP8

Oberthur Technologies Oberthur Technologies was a French digital security company, providing secure technology solutions for Smart Transactions, Mobile Financial Services, Machine-to-Machine, Digital Identity and Transport & Access Control. As of 2008, Oberthur's reve ...

and

Philips Koninklijke Philips N.V. (), commonly shortened to Philips, is a Dutch multinational conglomerate corporation that was founded in Eindhoven in 1891. Since 1997, it has been mostly headquartered in Amsterdam, though the Benelux headquarters i ...

. From Phase III and onwards it was developed by CP8 Oberthur Technologies and De La Rue Card Technology. It was based on the Belgian system named Proton. It was compatible with multiple suppliers of readers and terminals: , Certec, DateInet, Getronics, ICL, NCR, QE and Taxameter. In Phase I and II, it used the ST16601 chip by

SGS-Thomson STMicroelectronics N.V. commonly referred as ST or STMicro is a Dutch multinational corporation and technology company of French-Italian origin headquartered in Plan-les-Ouates near Geneva, Switzerland and listed on the French stock market. ST ...

which had 1 kilobyte EEPROM. In Phase III, it used the ST16F48 by the same company which had an 8 kilobyte EEPROM. The ST16 series is based on the

Motorola 6805 The M6800 Microcomputer System (latter dubbed the Motorola 6800 family, M6800 family, or 68xx) was a series of 8-bit microprocessors and microcontrollers from Motorola that began with the 6800 CPU. The architecture also inspired the MOS Technology ...

. The ST16F48 uses an 8-bit micro-architecture and has serial access which is compatible with

ISO 7816 ISO/IEC 7816 is an international standard related to electronic identification cards with contacts, especially smart cards, and more recently, contactless mobile devices, managed jointly by the International Organization for Standardization (IS ...

. The CMOS-based semiconductor is manufactured using the 1

micrometer Micrometer can mean: * Micrometer (device), used for accurate measurements by means of a calibrated screw * American spelling of micrometre The micrometre ( international spelling as used by the International Bureau of Weights and Measures; ...

process. The development for the chip is done using the ST16XYZ-EMU development system. The Chipknip network was based on the

X.25 X.25 is an ITU-T standard protocol suite for packet-switched data communication in wide area networks (WAN). It was originally defined by the International Telegraph and Telephone Consultative Committee (CCITT, now ITU-T) in a series of drafts ...

protocol. It made use of the

Data Encryption Standard The Data Encryption Standard (DES ) is a symmetric-key algorithm for the encryption of digital data. Although its short key length of 56 bits makes it too insecure for modern applications, it has been highly influential in the advancement of cry ...

and the

Triple DES In cryptography, Triple DES (3DES or TDES), officially the Triple Data Encryption Algorithm (TDEA or Triple DEA), is a symmetric-key block cipher, which applies the DES cipher algorithm three times to each data block. The Data Encryption Standa ...

with RSA using a secure access module. In 2011, Currence published about the rise of skimming with the Chipknip. Skimmers modified the device in such a way that information from the card could be read. Countermeasures were taken, such as front pieces in the ATM. In July of that year, Currence stated that the skimming was reduced to zero. The Chipper chip was manufactured by IBM and Schlumberger (of which the smart card spin-off Axalto later merged with

Gemalto Gemalto was an international digital security company providing software applications, secure personal devices such as smart cards and tokens, and managed services. It was formed in June 2006 by the merger of two companies, Axalto and Gemplus ...

). It used the STM 16SF48 with 16KB of ROM, 1088 bytes RAM and 8KB of EEPROM. It used

for security.

History

Pilot

U_kunt_hier_pinnen_+_chippen_sign,_Winschoten_(2020)_02

The Chipknip started as a

in the city of

on 26 October 1995.

Wim Duisenberg Willem Frederik "Wim" Duisenberg (; 9 July 1935 – 31 July 2005) was a Dutch politician and economist who served as President of the European Central Bank from 1 June 1998 until 31 October 2003. He was a member of the Labour Party (PvdA). Du ...

, then president of De Nederlandsche Bank which is the

central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central b ...

of The Netherlands called the Chipknip a "more or less revolutionary development". The city of Arnhem was chosen because it was most representative of The Netherlands as a whole in

market research Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Mar ...

. Professor and

Henk de Vries Henk is a Dutch male given name, originally a short form of Hendrik. It influenced "Hank" which is used in English-speaking countries (mainly in the US) as a form of "Henry". People named "Henk" include: Academics *Henk Aertsen (born 1943), Dutc ...

noted that the representativeness may be questioned because the

was a major employer in Arnhem, which might have favored adoption. The payment limit was set at 35

Guilder Guilder is the English translation of the Dutch and German ''gulden'', originally shortened from Middle High German ''guldin pfenninc'' " gold penny". This was the term that became current in the southern and western parts of the Holy Roman Emp ...

s. M. Roos, the director of the said in NRC Handelsblad that the Chipknip was already outdated at its introduction and should not be used. Companies that were part of

Vendex Maxeda is a Dutch retail company owned by American investment firm Kohlberg Kravis Roberts & Co. Activities Maxeda DIY Group is the market leader in the DIY segment and has 345 stores in the Benelux and more than 7,000 employees. Most stores h ...

Ahold Koninklijke Ahold N.V. was a Dutch multinational retail company based in Zaandam, Netherlands. It merged with Belgium-based Delhaize Group in 2016 to form Ahold Delhaize. History Growth in the Netherlands The company started in 1887, when A ...

did not join the pilot. Interpay director Stolwijk was surprised by this since they changed their opinion in a few days.

Countrywide

As of January 2000, there were 12.500.000 cards in circulation. Intellect CEO Graeme Inchley said in August 1996 that 2500 devices were ordered at their company for initial deployment. Banks advised using the Chipknip for payments up to 35 Guilders and PIN for payments up to 100 Guilders. In March 1996, Rabobank released their ''Smartfone'' to deposit money on the Chipknip from home, which costed 300 Guilders. In October 1996, Rabobank announced that they planned to make their Chipknip usable for internet payments. They ordered a million Chipknip readers from the company Datelnet from

's-Hertogenbosch s-Hertogenbosch (), colloquially known as Den Bosch (), is a city and municipality in the Netherlands with a population of 157,486. It is the capital of the province of North Brabant and its fourth largest by population. The city is south of th ...

and planned to release it in the first months of 1997. Using the so-called ''Chipknipper'' the balance could be read, the card could be locked and money could be deposited using a phone line. Once the card was locked, it could only be unlocked at a loading station. The countrywide deployment started at the end of the summer of 1996, a year earlier than originally planned. NRC Handelsblad noted in November 1996 that The Netherlands was an early adopter of electronic payments and that it was mainly beneficial for the banks themselves. The

Royal Dutch Mint The Royal Dutch Mint (''Koninklijke Nederlandse Munt'', abbreviated ''KNM'') based in Houten, the Netherlands, is a company owned by Heylen Group. It was established and previously owned by the Dutch state. History On 17 September 1806, when The ...

criticized the Chipknip for the aggressive marketing, forcing large transaction fees upon small and medium enterprises. As of 1997, over 30.000 VeriFone Smart Card systems have been installed by the Rabobank for the Chipknip. The stated in 1997 that the Rabobank falsely claimed in commercials that the Chipknip already had millions users. As of January 2000, there were 12.500.000 cards in circulation.

Rabobank Rabobank (; full name: ''Coöperatieve Rabobank U.A.'') is a Dutch multinational banking and financial services company headquartered in Utrecht, Netherlands. The group comprises 89 local Dutch Rabobanks (2019), a central organisation (Raboban ...

marketed the Chipknip from 2001 at residents councils of retirement homes. A few years later, 350 retirement homes had implemented the Chipknip, also because Rabobank delivered a working ATM. In 2003, then leaving director of Interpay Willem Stolwijk said that the usage of Chipknip lags behind the expectations. In 2003, a lawsuit was filed against the municipality of Nijmegen who only allowed Chipknip payments at their parking meters. The verdict was ruled in favor of the lawyer who sued the municipality. German car-using customers avoided Nijmegen because they were unable to pay with anything except the Dutch Chipknip. A prepaid Chipcard was introduced by InterEGI (Interpay Elektronisch Geldinstelling B.V.) for foreigners who do not had a Dutch bank account. In 2004, Rabobank introduced voice controlled Chipknip deposit devices in retirement homes. On 4 March 2004, Interpay founded the spun off named ''Brands & Licences Betalingsverkeer Nederland'', which would handle payment products so that Interpay could focus on transaction processing. On 17 May 2005, Currence was founded as a split-off from Interpay, who took over the Chipknip brand. As of 2006, there were 200.000 places where the Chipknip could be used, but this number also included locations where the Chipknip was deliberately made unusable by the merchant. Chris Hensen from NRC Handelsblad considered the Chipknip "the Lada of the payment systems". In 2006, Ilja Bruggeman from Platform Detailhandel Nederland did not blamed merchants for the low adoption of the Chipknip, because for them it would have been efficient, safe and cheap. He described the consumers as unwilling to make use of the system. Because they were unwilling, merchants did not installed it more widely, creating a

vicious cycle A vicious circle (or cycle) is a complex chain of events that reinforces itself through a feedback loop, with detrimental results. It is a system with no tendency toward equilibrium (social, economic, ecological, etc.), at least in the short r ...

. In 2007, migration to EMV was started, which made the chip compatible with both Chipknip and PIN. Most Dutch banks added the Chipknip chip to their standard payment cards, but the

used separate cards for Chipknip and PIN. According to a spokesperson, this made it easier for people to lend their Chipknip card to other people due to the low risk. A Chipknip transactions takes around 2 to 3 seconds. The Chipknip is mostly used on places where it is the only usably payment method, such as parking meters, candy vending machines or company cantines.

Chipper

On 20 April 1996, the Postbank formally left the Chipknip project. Sister company ING formally stayed in the Chipknip project, which was controversial. Chipper was founded by Postbank and ING Bank together with KPN Telecom. ING executive Marinus Minderhout worked on the development of the Chipper while he also was a commissioner at Interpay at the same time. In 1998, Postbank introduced the ''ThuisChipper'' (English: ''HomeChipper'') to deposit money from home to the Chipper card. After discontinuing the Chipper in 2001, Postbank investigated if the ThuisChipper could be made compatible with the Chipknip, which was not the case. According to the

Consumentenbond The Consumentenbond (CB, "Consumers association") is a Dutch non-profit organization which promotes consumer protection. History The Consumentenbond was established in 1953. As of 1997 it had 650,000 members and represented one out of nine Dut ...

, consumers could get their money back. It was promoted with the slogan "De toekomst heeft een Chipper op zak" (English: "The future has a Chipper in its pocket"). In 1997, it was already clear that the Chipper had failed. In

Zeeland , nl, Ik worstel en kom boven("I struggle and emerge") , anthem = "Zeeuws volkslied"("Zeelandic Anthem") , image_map = Zeeland in the Netherlands.svg , map_alt = , m ...

, an experiment with the was conducted, but in the rest of the country the Chipknip was widely used.

Transition to EMV and discontinuation

In August 2007, the announced that they have stopped promoting the Chipknip. In September 2007, Currence announced that they would be repositioning the Chipknip system to the ''parvenca''

market segment In marketing, market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as ''segments'') based on some type of shared charact ...

(portmanteau of parking,

vending A vending machine is an automated machine that provides items such as snacks, beverages, cigarettes, and lottery tickets to consumers after cash, a credit card, or other forms of payment are inserted into the machine or otherwise made. The fir ...

and

catering Catering is the business of providing food service at a remote site or a site such as a hotel, hospital, pub, aircraft, cruise ship, park, festival, filming location or film studio. History of catering The earliest account of major services be ...

). In December 2007, Mastercard announced that they planned to release a successor to the Chipknip on the Dutch market, called the Paypass, which was later rebranded to Mastercard Contactless. Currence was the owner of the

brand. They expected that with their marketing campaign ''het nieuwe pinnen'' (English: the new pinning) that merchants would drop support for the Chipknip. In January 2011, Currence predicted that the usage of Chipknip would decrease, because merchants have to sign new contracts with their banks for EMV compatibility and chipknip is not bundled in the same contract anymore. Currence deciced to discontinue the Chipknip service in March 2013. As of March 2013, Chipknip was responsible for 2% of the retail transactions. The costs to keep Chipknip operating would increase because it has it has to abide European harmonisation regarding the

Single Euro Payments Area The Single Euro Payments Area (SEPA) is a payment-integration initiative of the European Union for simplification of bank transfers denominated in euro. , there were 36 members in SEPA, consisting of the 27 member states of the European Union ...

. In April 2013, retail stopped accepting the Chipknip. The benefit of this is that customers no longer have to make a choice between Chipknip or Maestro and V Pay on the payment terminal. In November 2014, it was estimated that all 12 million Chipknip owners collectively had 70 to 80 million Euros stored on their cards. First, ING, ABN AMRO and Rabobank decided to withdraw money from the cards, but later Currence decided together with all other banks to do the same. Customers of

ABN AMRO ABN or abn may refer to: Companies * ABN AMRO Group, a Dutch bank group * ABN AMRO, sometimes referred to as "ABN" in shorthand, is a Dutch state-owned bank * Algemene Bank Nederland, a now-defunct Dutch bank Radio, news and television organizat ...

had 14 million euros of debit on the cards

customers had 27 million euros of money deposited on their Chipknip cards, 7 euros on average.

Algemeen Dagblad The ''Algemeen Dagblad'' () or ''AD'' () (English: "General Daily Paper") is a Dutch daily newspaper based in Rotterdam, Netherlands. History and profile ''Algemeen Dagblad'' was founded in 1946. The paper is published in tabloid format and ...

noted that "only elderly people will mourn at the discontinuation of Chipknip", because it was still relatively commonly used in

retirement home A retirement home – sometimes called an old people's home or old age home, although ''old people's home'' can also refer to a nursing home – is a multi-residence housing facility intended for the elderly. Typically, each person or couple in ...

s. The (most probable) last Chipknip transaction was made on December 31, 2014, at 23:59. Currence cited the decreasing usage as the reason for discontinuing it, but in reality the system was never used that much. According to Jan van der Kolk from the company Automaten Centrale, not all vending machines have been replaced on time, which caused problems if the machines did not also accept cash. Because there was not yet a good digital replacement, devices that were made compatible with the Chipknip earlier were made compatible with cash money again although consumers had a preference for digital money. When Leiden University discontinued the Chipknip, they made

coffee vending machine The coffee vending machine is a vending machine that dispenses hot coffee and other coffee beverages. Older models used instant coffee or concentrated liquid coffee and hot or boiling water, and provided condiments such as cream and sugar. Some m ...

consumptions free until a replacement was deployed.

References

Book sources

* * * *

External links

*
Chipper en Chipknip – strategische interacties
Dutch summary of "The Dutch Banking Chipcard Game: Understanding a Battle between Two Standards"
Financieel Erfgoed zet de laatste Nederlandse transactie op naam!

Reader Elektronisch Geld - De Nederlandsche Bank
{{Credit cards Stored-value payment card Financial services in the Netherlands