Meet Coin, the Future of Mobile Payments?

Michael Teague |

Have you ever looked into your wallet and dreamt wistfully of the day when the might of technology would finally be brought to bear on the seemingly unstoppable growth in the number of various plastic cards that are, at present, more or less necessary to make it along as a consumer in today’s economy?

If so, your prayers may have been heard, and answered.


Introducing Coin...

Last Thursday, a tech startup by the name of Coin held a pre-order campaign to help fund its new contraption, namely a card-shaped device into which all of your point-of-sale-related plastics, from credit cards to rewards cards, can be consolidated and subsequently used as any old piece of plastic. The success of the crowdfunding effort was undeniable, with the company meeting its $50,000 goal, through $50 pre-orders, in about 40 minutes, and could be taken as a clear indication that demand for such a product is high.

Coin’s electronic credit card, identical in shape to the traditional credit card, is slated for release in summer of 2014, and will have the capacity to hold up to eight different cards. Users will be able to toggle between whichever card is required by the given transaction, and the company is also developing a mobile app that will allow for the storage of an unlimited number of debit, credit, gift, rewards, and loyalty cards.

Whether one is using the card device, or the mobile app, the process for transferring the information from the original cards to Coin is simple, involving “a picture or two and swiping your Coin through a small device we provide you with.” according to the FAQ on the company’s website.


...the Newest Attempt to Solve a Well-Established Problem

The only problem for Coin is that the effort to consolidate or otherwise simplify the payment process is hardly a unique one in the era of mobile technology.

Indeed, the global total for mobile transactions in 2013 alone is already 44 percent greater at $235 billion than it was in 2012, and the figure is expected to increase another nearly 40 percent to some $325 billion in 2014, so it would actually be surprising if there had not yet been any significant investment in the space.

Furthermore, much of the work that has already been done has been with near-field-communications technology, which itself has failed to gain widespread acceptance despite offering users a fairly straightforward way of storing card-data in a secure chip on their smartphones, effectively turning the all-important handset into a credit card as well. Coin should count itself as incredibly lucky that NFC has not been embraced by companies like Apple (AAPL) , and that both telecoms and major credit card firms have so far been unable to decide which of them would be responsible for managing a payment platform that would make larger-scale adoption inevitable.


A Fragmented Mobile Payment Scene

The current state of the mobile payment market is for the time being an increasingly fragmented one, with Apple, Google (GOOG) and PayPal, along with a smattering of startups as well as retailers, fast-food restaurants, supermarkets and just about anyone else you can imagine toying with different ways of facilitating mobile payments.

Especially for the larger firms, holding out on joining a system that is not of their creation makes sense. The e-wallet ideas currently being considered by PayPal, Google and Apple could effectively bypass credit cards altogether, providing brand new revenue in the form of processing fees along with the all but captive audiences that are built in to their respective Android and iOS platforms.


So, How Exactly is Coin Different?

In a market that for the time being appears extremely resistant to consolidation, the question as to what differentiates Coin from the competition is an important one.

At the level of consumer psychology, it would seem that Coin offers the novelty of “old-school” plastic, but with a level of practicality commensurate with modern technological advances.

But a vague longing for the physicality of objects in an increasingly virtual environment is not sufficient on its own to support such an ambitious business plan, nor the interest it has attracted. Rather, it is likely that Coin is situating itself to make the best of the current situation while larger tech companies and startups continue to grapple with the task of designing the most convenient and inevitable way to make mobile payments.

While other companies have invested all of their focus into the mobile aspect of the equation, Coin’s 8-in-1 card has an advantage in that it will be immediately usable when it is released next year. Its value, in other words, is for the moment in not being tethered to a larger mobile payment infrastructure.

If Coin catches on, it will already have a mobile database and corresponding app that it can developed on its own, or that could make an attractive acquisition target for a larger tech company looking to make a game-changing play in the mobile transactions space.

But there is a more interesting way that Coin could establish solid footing in mobile payments. While major credit card companies could decline to allow their products to be used through Coin, a possibility suggested by CNN Money in an article that appeared on November 17, it is just as likely that they could see Coin as a hedge against the various attempts of tech firms to establish their own e-wallets and other forms of payment that could circumvent the central role of traditional financial institutions.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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