A New Kind of 'Smart' Card Thinks for the Consumer

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There have been many attempts in recent years to convince issuers and consumers to store multiple payment accounts in a single high-tech card, typically with an emphasis on consumer choice. A new approach uses the same technology but packs in data analytics to take some of that choice out of consumers' hands.

Qvivr Inc.'s Swyp card can store up to 25 accounts, and observes which card a consumer prefers to use at certain stores or at a particular time of day. With this data, Swyp determines which card should be "top of wallet" for each purchase the consumer makes.

"The card you use most often automatically shows up," said Ash Dhodapkar, CEO of the Sunnyvale, Calif.-based vendor. "You don't have to sift through a group of cards to make a choice."

Swyp cards will cost $99 when they ship in the fall, about the same as a rival product called Coin. Swyp halves its price for pre-orders, but $49 is still a steep cost considering that consumers are accustomed to getting their payment cards for free. 

"There have been big challenges with this sort of technology because it's hard to get consumers to pay for it," said Rick Oglesby, a senior analyst and consultant at Double Diamond Payments Research. "These companies are left with trying to come up with enough features to attract a $50 to $100 investment from consumers. It's pretty tough to pack that many features into a small piece of plastic."

Swyp's model may be compelling to issuers that are frustrated with alternatives such as Apple Pay, which picks the first card enrolled as the default card and doesn't provide any incentive to the consumer to switch payment options.

But issuers may not want to foot the bill for a $99 multi-account card, since they prefer to use their traditional single-account cards to maintain a "brand connection" with the customer, Oglesby said.

Swyp plans to partner with merchants after it completes preorders. The company designed its product to store more than just payment information; "anything with a magnetic stripe" can be linked to Swype, Dhodapkar said, and this includes merchant loyalty cards and even insurance cards. "We want it to be a replacement for the entire wallet," he said.

Dhodapkar is positioning Swyp as a "bridge" between mobile payments and traditional in-store payment hardware. Consumers use Swyp as they would a plastic card, so the company does not require changes in merchant point of sale terminals.

Swyp use Bluetooth Low Energy technology to connect with the app on a user's mobile device. Consumers create a four-digit PIN that grants access to the app, and enables each payment with the Swyp card. "If the card goes beyond six feet away from your mobile device, it locks up," and the data is encrypted, Dhodapkar said. (There is a "restaurant mode" that allows wait staff to use one pre-selected account on the Swyp card).

The Swyp cards are initially mag stripe cards, though the company said its platform is EMV-ready. It will add Near Field Communication as more terminals are upgraded to accommodate mobile contactless payments, and Swyp is monitoring other transaction technology such as tokenization and virtual currency.

"We can push updates through the mobile app," Dhodapkar said. "You don't have to buy a new card."

Swyp's strategy is similar to other providers of connected cards, such as Coin and Stratos, which are to some extent betting against technologies like Apple Pay. These companies expect that shoppers will prefer to pay with a plastic card, despite the financial services industry's significant push to move consumers to mobile devices.

Coin has faced some challenges in the early going, including friction with its beta testers and crowdfunding supporters.  Another multi-account card maker, Dynamics Inc., works with issuers but had a drawn-out and ultimately fruitless beta period with one of its earliest partners, Citibank.

Stratos predicts that consumers will want a combination of mobile account access and a plastic multi-account card. 

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