A Startup That's Building a Universal Credit Card

Coin Courtesy Coin

As the contactless payment technologies, from Google Wallet to Isis, flounder, critics point to what now seems rather obvious: Silicon Valley is trying to fix a system that isn’t broken. Swiping a card through a point-of-sale magnetic stripe reader is easy, and it works in millions of locations. In fact, the mobile payment companies that have been most successful, such as Square and PayPal, aren’t necessarily trying to change that basic transaction—they’ve just made it possible to use your plastic in more places.

Kanishk Parashar learned that lesson the hard way. The PayPal veteran developed a smartphone wallet app in 2010 called Smart Market that went nowhere. But now he’s founded a new company called Coin that isn’t messing around with the fundamentals of the basic credit card swipe. Instead, it’s building a better credit card.

The startup, backed by Y Combinator and K9 Ventures, has created what amounts to a universal credit card that can reprogram its magnetic stripe on the fly to match any card you load into it. It will work not only with credit and debit cards but gift cards, loyalty cards, and pretty much any plastic that can swiped, Parashar says.

Coin is the size of a standard credit card and has an interface that lets you cycle through your stored cards. A small screen displays your name, expiration dates, card security codes, and anything else a merchant needs to verify the transaction, with the exception of a signature.

The device connects to your iOS or Android smartphone through Bluetooth, but a connection to the phone or to the Internet isn’t required to use Coin. Its app provides a way to load new cards (through an accompanying mag-stripe dongle) and manage the cards already stored in Coin. The device uses 128-bit encryption to secure all data stored and transferred, but it also uses Bluetooth as an additional layer of security. If your Coin loses radio contact with your phone, it will lock up and send you an alert. You can unlock the Coin with a code in case your phone battery dies, Bluetooth conks out, or you leave it in the car.

The device has an internal nonreplaceable battery that Coin claims will last two years. It’s also designed to take a lot more abuse than your regular credit cards, Parashar says. It’s shock and water resistant, and its strip won’t demagnetize in the presence of magnets, other credit cards, or electronics, he says.

Though Coin has seed funding, it still needs, as a hardware company, to raise funds for manufacturing, says Parashar. It’s launching the product with crowdfunding, hoping to raise $50,000, though it’s not taking to Kickstarter or Indiegogo. Instead, it’s taking preorders for the device on its website. The first backers will get the device for $50, though it will retail for $100, Parashar says. He expects the first shipments will go to buyers next summer.

I’ll give Parashar credit: Coin’s a novel concept. Unlike other mobile payments companies, Coin’s not trying to replace the leather wallet with a digital one. But it’s trying to make that physical wallet a lot less bulky.

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