Remember George Costanza’s wallet? George was one of the four main characters on the hit show “Seinfeld” and had a wallet so full of junk that he was unable to sit upright. In fact, George’s wallet was so ridiculously large (Jerry called it “morbidly obese”) that it exploded, casting his receipts into the streets of New York City. If your wallet is overweight and creeping into the same category as George’s, you might find some interest in San Francisco startup Coin.
Last month saw the announcement of the first product from Coin, and it has the potential to increase the efficiency and security of the traditional wallet, while stripping it of its girth.
The product, also called Coin, is a credit card-sized electronic wonder that stores up to eight different cards (credit, debit, gift, membership, or loyalty) and allows you to switch on demand by pushing a small circular button on the front. Coin is intended to allow you to combine all of the cards you’re currently carrying into one sleek electronic version. Because it’s the same size as a normal credit/debit card, you can swipe it in any conventional reader or ATM.
Coin CEO Kanishk Parashar started down this path by working on SmartMarket, an app designed to let people pay for purchases using geofencing. While downloads of the app were going well, no one was using it. The adoption rate was too low to be sustainable. As he looked around at the market, he realized the problem: SmartMarket required people to drastically change their behavior by processing transactions through his app, and they weren’t doing it. So he switched gears and began looking for ways to simplify what people are doing normally, not drastically changing it. Coin became that solution.
â€œI learned a big lesson from my last company where I built a payment system purely on mobile phones. What I found was it didnâ€™t scale, we couldnâ€™t change peopleâ€™s habits,â€ Parashar says. â€œWith Coin we have a system that works now. It works today but it has the technology for tomorrow so it will fit where weâ€™re headed into the future.â€
This relatively simple idea packs a surprising amount of technology. To be successful, the final design had to remain very small, since it needed to work in the same machines that accept credit cards. Coin has a magnetic strip like a normal card, but the magic here is that Coin’s patent-pending magnetic strip changes on demand.
To load your cards into Coin, you’ll use a small reader to scan them into the accompanying Coin mobile app, which then syncs with the device itself over Bluetooth Low Energy (BLE), the same protocol used by many fitness trackers. By using BLE, Coin expects the internal battery (which isn’t rechargeable) to last about two years. The battery is necessary to change the encoding on the magnetic strip and power a small black and white e-ink display that shows the name of the selected card, the last four digits, and the CVV number.
But the 128-bit encrypted Bluetooth connection also enables some unique security features. For example, when Coin moves away from your phone (like after you hand it to a waiter) the button is disabled, meaning that the selected card can’t be changed by accident. The phone app can also notify you if you’re walking out of a restaurant without the Coin in your pocket, averting the pain and suffering that comes with a lost card (or wallet). If you lose the Coin itself, it will automatically deactivate, further safeguarding your accounts. Coin also features a system that shows how many times your card is being swiped, and will tell you if someone is using it when it isn’t near you.
To eliminate concerns about someone using the app and device to steal credit cards, Coin has said its app won’t let users add information for cards they don’t own, a feature that will be powered by a financial-data service like Intuit.
Coin is available for pre-order now for $50 until December 12, but will cost $100 for new buyers when it ships in summer 2014. It looks like the second time’s a charm for CEO Parashar: After the announcement, they exceeded their initial $50,000 goal in just 40 minutes. You can get yours here.