By now you've probably seen the ads for Dexit sprinkled over subway stops and bus shelters, poised to dethrone ING Direct from its monopoly over the colour orange.

Dexit is the newest smart card on the market. Launched in Toronto a few months ago, it's being billed as a welcome alternative to cash – specifically, coins – in the Canadian market. The theory is that consumers would rather hold onto a wafer-thin card than tons of heavy change for small purchases like coffee or a sandwich.

The card, which gets scanned, holds money taken from your bank account. Instead of relying on a magnetic stripe, which is prone to getting scrambled, Dexit's little secret is a radio-frequency ID (RFID) tag with a unique number linked to a single customer. When your card runs low, you pay $1.50 to top up your account.

The main problem with the system right now seems to be availability.

The Second Cup, where Dave Johnston works, is one of 350 Toronto locations where Dexit is being tested.

"It's not really being used a lot," says Johnston. "We've probably had 10 purchases since we got it two months ago."

Dexit president and founder Renah Persofsky remains hopeful.

"Canadians are seen as leaders in this niche market," she says. Last week her company announced a partnership with Californian technology firm SST, which will test the Dexit system in four locations south of the border.

Dexit is also in talks with major merchants like Tim Hortons to provide stores with scanners at any location within a chain. This focus on brand loyalty is also being addressed by allowing users to set up loyalty cards and coffee club cards on their virtual account.

"People love their Dexits," says Persofsky, "but they also love their loyalty programs."

Dexit focuses on what Persofsky calls "micro-payments": buying coffee or stamps. They have recently joined the restless world of online commerce for small items like MP3 songs or newspaper articles that aren't big enough to tempt people to give up their credit card information.

"Students are excited about this," says Persofsky, "because they'll be able to buy things like research documents by docking a few cents off their Dexit account."

Only time will tell if Dexit will make it or if it's doomed to follow Mondex, one of the first "smart cards" piloted in North America, into oblivion.

In the late 90s, Mastercard tried to convince students at the University of Guelph that its magnetic-striped Mondex card was an effective alternative to cash. It ultimately failed, as people saw no need to add another card to their already bulging wallets.

But Dexit is purposely marketing itself as a system for buying low-cost items, and might just have the technological strength in its RFID platform to see itself through the awkward embryonic phase of any new technology.

In the meantime, if you're sitting on a large pot of change that's grown like a colony of rabbits under your bed, bring it to Dexit's kiosk at First Canadian Place and, for $1.50, dump it in the sorter in exchange for a Dexit tag. It's a flat fee, which beats the 9 per cent they charge in grocery stores.