Coin is, in theory, the next big thing in payments. It’s a credit card that stores all your credit cards in one place and lets you swipe any card, anywhere. It’s a clever idea, and it fits well with mag-stripe readers… but we have a few questions.
1. What’s The Backup?
One rather glaring problem with Coin that the startup has yet to answer is what you do when, say, you’re out on the town and your Coin suddenly dies. The company has admitted that the form factor makes including either a replaceable battery or a rechargeable one pretty much completely impossible, so you have to get a new Coin whenever the old one dies. But obviously they’re not delivering that to you on a moped, so one hopes there’s a strategy beyond “Hope your date hasn’t hit her credit limit.”
2. Is It Crackable?
Another issue that’s got our attention is that once you throw out your old card, it’s not clear what happens to the data. Does the battery dying completely wipe it? Do you have to shred it? What happens when somebody inevitably pries it open and recharges it? It’d be nice to know what the company plans to do when fraud inevitably comes up. Speaking of which…
3. What If Somebody Swipes Your Card?
The main problem we see with Coin is that it seems to be making credit card fraud more precise and efficient. The video shows that all a scammer needs is a few minutes alone with your card and the ability to access your account, so somebody with the wrong text alerts and the wrong “friend” could have their debit card loaded onto someone else’s Coin within a minute. And what about divorced couples with shared accounts? Will Coin offer tools to block attempts at financial revenge?
4. What If You Want To Loan Someone Your Card?
Again, this isn’t mentioned, but there are people you absolutely trust. I have handed my wife a credit card in my name with no reservations whatsoever, because, obviously, I trust my wife. With Coin, it would essentially assume that my card was stolen unless I gave her my phone as well, which isn’t really a workable strategy. So that raises the question of what you can loan and where you can loan it, especially if, say, you’ve got to hand over your card to pay for dinner at a restaurant.
5. What About Skimmers?
One of the big benefits of paying with mobile is that card skimmers, the little devices thieves use to scan your card as you slide it in and out of ATMs, gas pumps, and other POS machines, are effectively neutered. It would be nice if Coin had any sort of solution for this problem, especially as it’s becoming more prevalent. So far, though, that doesn’t really seem to be the case.
In short, Coin is still an intriguing idea, but it’s one that seems like it’s got a few downsides that haven’t quite been properly addressed. We’ll keep an eye out.