Payment cards aren't dead, but they are buried under a growing pile of new and high-tech payment devices.
This trend has led Coin, which made its name by designing a high-tech multi-account payment card, to adapt its technology for the growing wearables industry rather than bet everything on its flagship card product finding a wider audience.
"The card has really great benefits for consumers, and they have been using cards for a very long time and will continue to do so," said Kanishk Parashar, Coin's CEO. "But the share of what gets used will move around and it would be wise to keep track of that as people want to pay with new things. You have to embrace that and grow to 'wow' the consumer."
Coin's branding suggests a world where cash is obsolete and the word "coin" would fall into disuse if the company had not come along to apply it to a new technology, much like the word "calculator" was originally a job description before it was repurposed as the name of an everyday gadget. In a world where many companies are trying to shoehorn wallets into a mobile app, Coin has been trying to do the opposite by placing an app's functionality into consumers' physical wallets (though a smartphone app is required to load accounts onto the Coin card).
Critics have long questioned the value of Coin's product, particularly at its $99 price point. When the card was originally announced in 2013, West Monroe Partners surveyed 124 of its consultants about Coin, with more than 70% saying the card solves a real problem, but 68.5% also saying its price was far too much. During Coin's 2014 rollout, its early backers were upset by fulfillment issues and tech changes. Nevertheless, the company soldiered on, adding technology such as contactless payments and EMV while keeping the same basic form factor of its card.
But if Coin was a tough sell for consumers, it is a much easier sell for device makers that want to add payment capabilities to their existing product line.
Moov Inc., for example, has discovered that consumers keep wearing its fitness devices after their workouts, an observation that has Moov interested in embedding more capabilities, including payments. It began working with Coin through the vendor's recently announced partnership with MasterCard.
"It's an easier move to pay by swiping your wrist instead of taking out a phone or a wallet. But if we did this on our own, it would be harder," said Erick McAfee, head of global business partnerships for Moov, adding MasterCard and Coin's recognition as payments brands would be helpful in attracting consumer adoption for wearable payments. "It makes sense to us to partner with MasterCard and Coin."
When wearable computing referred mostly to Google Glass, a headset device that was derided for being unfashionable and expensive, payment companies kept their distance from the segment. But the widespread consumer interest in fitness bands, smartwatches and similar products has created new opportunities for payment companies to reach beyond the wallet and smartphone.
But getting there will be tough for companies that are just starting now, Parashar said.
"Through all of our work integrating [NFC and tokenization] we realized the process of doing that is long, difficult and costly," Parashar said, adding Coin can streamline that process for other companies that want to embed payments in wearables. "You don't even have to meet with us. You can use our site to get what you need to get going."
This new role for Coin should help the company capitalize on its brand recognition while overcoming the reputational issues that may still linger from its earlier troubles.
"It appears that Coin has developed a version of their 'card' that is implantable in a number of different devices," said Thad Peterson, a senior analyst at Aite, adding this could be a "really interesting pivot to a new space for Coin."
Coin's technology is designed to be "transferrable," Parashar said, adding that while cards were the initial device to house the mobile enabled multi card functionality, the embedded capabilities that power the service are more important than the form factor.
"Will people actually use this stuff? Over time as things go digital, rather than what we've been used to over the past several decades, trends will emerge," Parashar said. "But it's hard to get that future right now."