Confession: Though I have never used Coin, I love the idea. I love the melding of new school cool with old school tech—in this case, the pervasive plastic card with the well-worn magnetic stripe along the back. While everyone is scrambling to bring commerce to mobile devices, Coin has the potential to preserve the tangible payment method we’ve grown accustom to.
The company’s slick demo video has already garnered nearly 7 million views, and their crowdfunding campaign site earned them a whopping $50,000 worth of pre-orders in their first 40 minutes. There’s clearly a demand for this revolutionary card among trendsetters and early adopters, but will less tech-savvy consumers and merchants be willing to propel Coin to the mass market?
Coin is a credit card, debit card and loyalty card, all in one. It aggregates, but does not replace, your existing cards. The hardware and software behind Coin is designed for today’s highly mobile consumer, but the best thing of all, it still looks, feels and acts pretty much the same as your standard credit card.
When it comes time to pay, pull out your Coin card and swipe, exactly as you have thousands of times in the past. It’s got the same length and width dimensions of a standard credit card, making it an easy fit for any card reader or wallet.
Coin works by consolidating the unique digital codes of your personal cards into one easy-to-manage device, allowing users to cycle through these precious numbers with the push of a button. If your card has a magnetic strip, Coin can store it.
At the supermarket, tap the nearly invisible button on the front of Coin and select your grocery store’s loyalty card to collect your value points. Tap it again to select which credit card you’d like to use to pay for your items. Walk to a nearby ATM, select your debit card, and withdraw cash from your checking account in an instant, all thanks to Coin. Its small screen lets you know exactly which card you are using, reducing the risk of human error.
Coin is one card that serves the purpose of many cards. While Google, Apple, PayPal and other tech giants build out their mobile payment platforms, all in the hopes of capturing a profitable slice of the trillion-dollar payments market, Coin may very well have created an unassailable niche. It’s a mag-stripe card, exactly like we all embraced in the late 20th century, yet with enough computing power to thrive in our modern age.
As Coin inventor Kanishk Parashar told Wired, “You trust [cards. They feel] good in your hand. And they’re pretty much here to stay.” The company’s strategy is to fully maintain the look, feel and popularity of the familiar and nearly universally accepted mag-stripe card, while evolving it to meet the demands of today’s social, mobile, highly technical marketplace.
Coin requires some initial set-up on the user’s part. First, you’ll need the Coin dongle—a device that looks like a Square Reader and plugs into your smartphone (iPhone or Android). Next, swipe each of your cards into your smartphone and take a picture for reference. Lastly, add any relevant details about each card, like its priority level or where you primarily use it. There’s no limit to the number of cards you can add to the smartphone app, however, users can only store eight cards at a time on the Coin itself.
Coin is slated for a public release in the summer of 2014, with those who took advantage of the $50 pre-order price getting first dibs on the device. Anyone who missed out on the special offer will have to shell out $100 for a Coin of their own.
The company promises 128-bit and 256-bit encryption on both the server side and the mobile app, as well as on the card itself. That’s no guarantee it won’t be hacked, but Coin is essentially a “container” for your many other cards, all of which can be stolen, lost or misplaced just as easily and have their own security measures in place.
In addition, the company says Coin will include Bluetooth-capability. Thus, if you leave the card at a restaurant, for example, your phone will be alerted the moment you are out of range.
There are also additional security features, like custom fraud alarms and a single-card lock option that will prevent waiters and other vendors from switching your credit or debit card profile before processing your payment.
The Push has examined the payments industry across several articles, and despite the large number of exciting players entering the field, not one of them has shown signs of guaranteed success. The payments market is massive and in flux. Silicon Valley tech companies and major financial institutions alike are fighting for a share, and no one—not even Google or Apple—has taken a lead or truly altered consumer behaviors on a wide scale.
That said, Coin’s clever blend of familiarity and technology just might pay off. The company met its pre-order goal of 1,000 units in less than an hour after launching its video. Yes, it could just be techies chasing the next thing, or it could represent the public’s willingness to evolve the payment process. So far, the leap from credit cards to mobile payments has been too drastic for many consumers, but Coin could be the missing link between tradition methodology and the widespread acceptance of something new.
Aside from customer confusion and security paranoia, Coin has a few other woes to take into consideration. For one thing, coin is a digital device, meaning it does require a power source. Unlike credit cards, which expire every three or so years (or until they snap in half) and are generally replaced for free, Coin has a non-rechargeable battery that will only last up to two years. That’d be fine if Coin cards were as easy to replace as a credit card, but unless they decide to drop the price, Coin replacements will set the user back another $100 apiece.
Another serious issue that few have talked about is merchant participation. Merchants may prefer to clearly see exactly which card you are using, since different cards and types (e.g. debit vs. credit) have different fees and requirements attached to them. However, Coin’s lack of need for new equipment or processes is likely to mitigate any merchant concern.
The payments market is filled with companies vying to take preeminence inside and over our wallets, and Parashar is convinced Coin is up to the task. After failing to hit critical mass with his previous financial startup, SmartMarket, Parashar gained an important insight that became Coin’s cornerstone.
“The market is so large that if you have a product that completely tries to replace what everyone does, change everyone’s habits, the chance of adoption is essentially zero,” Parashar explains. By combining the comfortable familiarity of credit cards with the allure of modern technology, it looks like Coin has found a secure space in this large and highly-lucrative market.