Credit cards may soon be relics of the past if Coin lives up to its hype.
Coin has created a gadget the size of a single credit card that can store payment data for all the cards in your wallet. It can be swiped for payment just like any other credit card. “Coin is designed for the lifestyle of today but with the technology of tomorrow,” said founder and CEO Kanishk Parashar in a release.
The company says that the product is a completely unique and secure device that fits seamlessly into your wallet or purse. The secret behind the Coin is that it is powered by a 128-bit encryption for all storage and communication. Through the magic of Bluetooth, your phone will even notify you if you’ve left your Coin card back at the cashier or at home.
There’s plenty of hype surrounding the product, which became available for $50 pre-sale on Thursday, but which will not hit the market until summer 2014. Part of the attention is due to the high profile venture capitalist firms that have invested in its development, Y Combinator and K9 Ventures. But as well, consumers are eager for this type of technology.
”Coin is the result of the demand for mobile payments,” says George Wallner, co-founder of Loop and visionary behind the launch of the first modern mag stripe POS terminals that support today’s electronic industry
For those looking to take the plunge and unclutter your wallet, here’s how Coin works. You receive your Coin card and a card-swipe dongle that connects to your smart phone or tablet and allows you to save all your card information in the mobile app. After syncing your cards with the app, your card data is automatically stored them on your personal Coin card. Once you have set up your Coin, you no longer need the accompanied app or your iOS or Android device in order for Coin to function, unless you want to manage, add or delete existing cards.
Of course, the inevitable question with a cool, new gadget is whether consumers will actually buy it. According to research by Walker Sands, a technology communications firm, 1 in 5 consumers aren't carrying any cash and 3 in 5 report carrying $20 or less. But, despite the lack of cash, only 8 percent use mobile passbook-like applications. “The development of Coin could be significant, since it provides consumers a way to store not just one, but multiple cards in a single location in a secure way,” says Mike Santoro, president of Walker Sands.
Coin is not the only company focused on innovating payment. In fact, banks are eager to move beyond magnetic strip cards into secure chip cards. “The primary security problem with cards in the U.S. is that it’s easy to capture and replay the contents of the [magnetic] stripe. When done by criminals, this is called skimming,” says Paul Kocher, President and Chief Scientist at Cryptography Research Inc. (CRI), a San Francisco-based R&D security company. “Coin is essentially doing the same thing, but for the cardholder’s benefit. …The U.S. will be rolling out chip cards soon in preparation for transaction liability rule changes in 2015, and Coin won’t work with the new cards.”
But for now, Coin is the coolest payment gadget available. It’s launching a crowd-funding campaign in an effort to raise $50,000 in order to produce the first series of cards. During this initial crowd-funding stage, the Coin card will cost only $50 to early backers. Once it launches, it will retail for $100.