In the past few years, we've seen a lot of new payment technologies deployed in the US. Just to name a few, there's Square, Google Wallet, Square Wallet, Bitcoin, Coin, Wallaby, and ISIS (the last 3 only being launched this week). Some of these are pretty worthwhile. Some of these are pretty terrible. Here's a quick rundown of what each is.
You've probably seen Square readers if you live or have travelled to a large city. They're the little white square readers that plug into phones and tablets. Here's what one looks like:
As a consumer, you really don't have much need to sign up for a Square account. They're geared towards people selling stuff. I included it here because it is a pretty radical payment technology, and it is enabling people to accept payments and provide competition to rip-off banks. Your credit card info is safe when using these readers. Don't worry.
Like many Google products, this one has changed a lot since its introduction. Hell, it might even still have the infamous Google "beta" tag. Wallet was originally planned as a method to store all of your credit cards on your phone, then zap credit card information to payment terminals using NFC. NFC is a passive communications technology that transmits data at a very short range. Google Wallet had a lot of promise, but the US wireless carriers (AT&T, Verizon, and T-Mobile) blocked it. Nothing new here, but it really was a shame. Verizon wouldn't approve the Google Wallet for use anywhere on their devices. T-Mobile and AT&T killed the NFC features. So what use is it? Well...you can send money to another person (over email) with it. Or you can root your phone and use the NFC features. Otherwise, it's pretty useless (or just another Paypal clone).
Square Wallet has the same goal as Google Wallet (carry all of your payment info in one place on your phone), but it doesn't use NFC. It uses traditional phone data channels to transmit payment information. It's an OK idea in principle but there are a few shortcomings:
1. The vendors must have a Square terminal, or be a Starbucks (though the Starbucks payments are super clunky).
2. The app forces me to enter my password every time at launch. My Square password is super long and secure, stored in 1Password. That means I have to launch 1Password, enter that key, copy the Square password, launch Square, and paste the password. Ehh no. That's terrible. Just give me a 4-6 digit PIN to use and unlock the app.
3. Sending payments over-the-air is more error prone than something like NFC. It's an old-fashioned solution for today's high tech world. I just don't like it.
4. It only works because no-one uses it right now. You have to open up your wallet before you purchase, then say "pay with my square wallet." The cashier checks the terminal and chooses the right person. Only, what if they choose the wrong person with their wallet open? That happened to me. If there's only a single wallet open, it works. What if there are 12 open? Bad design -- too many humans in the loop.
In short, Square Wallet had good potential but implementation is still meh.
There are a ton of articles out there on what Bitcoin is and how it works, but I'll include it here as it is a new payment tech. In short, it's a new virtual currency that's fairly anonymous and has inflation determined by math and computing power rather than a nation's central bank (read: politicians). There is no physical bitcoin transaction, it's all online. Think of it as a more anonymous version of Paypal, just shadier and harder to use. To me, Bitcoin feels like PGP keys in 1994. Everyone thought that they'd revolutionize everything, everything would be encrypted, and everyone would have a PGP key. To this day, PGP/GPG keys are still only used by uber nerds and people doing nefarious things. To me, that's who I see using Bitcoins.
Coin is an interesting hardware take on the too many credit card problems. The premise is simple: load up information from multiple credit cards on to a single physical card. A kind of credit card virtualization platform for my server nerd audience. With every Coin order, you'll get a credit card reader similar to the Square reader. However, it's not used for accepting payments -- only for storing credit card info on the Coin. From the videos, the process goes like this:
1. Insert the reader into your phone (iPhone or Android)
2. Launch the Coin app
3. Take pictures of your credit cards through the app
4. Swipe your Coin to store your cards
5. Push a button on the Coin to cycle through the cards and swipe when ready
I carry multiple cards for personal and business expenses, yet I like to keep a really small wallet. For someone like me, the Coin is close to ideal. I can basically carry a single "swipe" card and choose which one I want. The Coin isn't shipping yet, but I've pre-ordered two (one for the wife) and will write up a full review after I've used it for a bit. Here are some of the potential issues for the Coin that I can see:
1. Only stores 8 cards. Should be enough for most. Still, this seems a little Bill Gates (640KB memory is enough for anyone) considering it's 2013.
2. It will confuse store clerks at first. It looks like some hacker tool, and they might refuse to swipe it. Also, they might have trouble figuring out where the expiration date is and such.
3. No smartchip/PIN support. Not a big deal in the US right now, but this basically means the Coin market is US only right now. The rest of the world uses smartchip and PINs for credit card payments. Yes, we're totally backward for now. Supposedly the US will mandate EMV support in the next decade...but they said that a decade ago. The banks will really only push it once fraud rates mandate it.
4. Thicker than a regular credit card. The Coin really is relegated to swipe only terminals. I wouldn't put it in anything that "eats" or "sucks in" your card like an ATM terminal. The net of this is that it's credit card only -- you'll still need to carry your ATM card. The Coin team says it should work in a "dip" terminal, but I really wouldn't put it in one that sucks your card in (BofA ATM's come to mind).
One neat thing about the Coin is that it's Bluetooth enabled (lower power). If you leave your Coin, your phone will beep at you (I'm guessing once it loses connection).
I think the Coin holds a lot of promise for US consumers, but we'll see.
The Wallaby Card is for the coupon clipper and rewards maximizer crowd. You get a single card to automatically maximize your points, rewards, or cash back depending on the merchant and purchase. It really is a great idea for people who are into that and have 10 cards. Personally, I use my AMEX for purchases. If they don't take AMEX, I'll use my Visa. That's about it. This card isn't for me, but I do know people who are drooling over this card (hi Chi!).
The one drawback I see to this is that you don't have much choice over which card they choose. You tell it what to maximize, but the ultimate card choice is up to them. This means no mixing business and personal cards (or get 2 Wallaby cards and split), and it means you should pay your cards in full every month. You should pay in full every month anyway, but this really means you should. Imagine if you have one card that has no interest payments and another that charges 25%. You don't get to pick the 0% interest card.
One cool thing with the Wallaby is that you don't change any of your banking relationships. You still pay your normal credit card company. You just use your Wallaby card instead.
I saved the most LOL-tastic, poorly implemented technology for last. This thing is looking like a total failure at launch. ISIS is the technology that the US phone carriers killed Google Wallet over. Yes, this is the product offering from AT&T, T-Mobile, and Verizon. This is why Google Wallet was knifed. It's because they killed Google Wallet that makes this thing so much worse. If you can't build a better mousetrap, don't tell your partners you won't sell theirs.
ISIS is (in theory) just like Google Wallet. You store credit cards on your phone and use NFC to make payments. Great, only the ISIS implementation is so bad, you'd think Sterling and Mallory Archer are behind this thing. Let's go through some of the gotchas:
1. Requires NFC. Not a problem if you have an Android phone. Right now that means no iPhone support. Adios broad adoption.
2. Requires a new SIM. Pay $10 to your carrier. I'll save you the hassle, don't pay. Don't get a new SIM. This service is terribad.
3. Signup requires an over-the-air connection. Why can't I sign up over WiFi? Why must I disable WiFi to sign up? Can't you leave WiFi enabled and just force an OTA connection? Terrible user experience. This wouldn't be big problem if it weren't for #4....
4. The signup process takes 10 minutes. Literally. From when you launch the app and enter your info, it takes 10 minutes for the thing to actually create your account. No lie, it took me a dozen attempts. I have the dozen emails they sent me saying "Sorry, shit didn't work." It's easier to signup for a healthcare.gov account than an ISIS account.
5. Not all credit cards are accepted. Yep, only certain cards from AMEX and Chase work. I thought this wouldn't be a problem since I have AMEX and 2 Chase cards. No dice on the Chase. Our Chase Ink card was a no go. My co-branded Chase card came up bupkis. There's only like 3 Chase cards that work with this thing. So basically, I can only use this for NFC payments on my AMEX. Great.
6. Adding cards requires too much mobile browser work. It's really poorly thought out. Just take images of the cards or let me input the data. Signing into banking websites on your phone is just bad user experience.
A certified Creole coonass just trying to get by. I live in San Francisco and work as a digital plumber for the joint that runs this thing. (www.weebly.com)