Multi-Account Cards Grab Fresh Attention

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A new multi-purse card called Coin recently caused a commotion as it sparked interest in the concept of a card with a dynamic magnetic stripe. But other companies have pitched similar concepts before.

Coin offered its card for $50 to early adopters who pre-ordered its product. The company said it would raise the price to $100 after it successfully reached its $50,000 goal on Kickstarter's crowdfunding website. Coin reached its goal in 40 minutes, says Gil Mermelstein, managing director at West Monroe Partners, a management and technology consulting firm.

While this would seem to suggest that consumers are willing to pay top dollar for a payments tool that adds value, Mermelstein says the price is steep enough to turn most consumers off. A spokesperson from Coin did not respond to emailed questions.

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 $100 was far too much, Mermelstein says.

"At the top line it looks like a cool product that will have some followers," Mermelstein says. "I'm not sure it's a mass product in terms of being ubiquitous and changing the ways people work with plastic."

When Coin launches, it could store loyalty cards and provide real-time rewards and offers through Bluetooth Low Energy, which it already uses to communicate with a user's smartphone to alert the user when the Coin card is out of range, Mermelstein says. Targeted rewards and offers "is where a mobile payments solution could be much more compelling," he says.

Bluenio, a U.K.-based security technology company, has a similar product launching next Spring. The company's upcoming payments card stores multiple accounts and uses Near Field Communication to initiate purchases. Bluenio has been using Bluetooth Low Energy technology to alert users about lost items for about seven years.

"On this side of the pond there are two main drivers…chip-and-PIN and [Near Field Communication] has taken off pretty well," says Ben Hounsell, cofounder and CEO of Bluenio. "One in four payments are contactless here in Europe."

But, just as Coin's marketing emphasizes, there's an interest from consumers to lighten their wallets, Hounsell says. Bluenio's card is rechargeable, stores 20 accounts and allows proximity settings to be adjusted to alert a consumer from a couple feet away to 60 feet, or it can be turned off altogether, he says.

Bluenio "is talking to some pretty well-known banks about integrating into existing payment systems," Hounsell says. Bluenio plans to launch the card all over the world, but the vast majority of people backing the company are in the U.S., he says.

Microsoft has also tested BLE with its Zero-Effort Payments system, which the company piloted in cafeterias on its Washington campus in 2011. Apple supports BLE in its latest iOS operating system, and PayPal uses BLE as the foundation for PayPal Beacon, a plug-in device that communicates with the PayPal smartphone app to automatically check in shoppers at certain stores.

Dynamics also built plastic card technology that allows for several cards and rewards programs to be stored in one dynamic card that rewrites the magnetic stripe when the user presses a button on the front of the card. Dynamics launched a game-based rewards system recently, with Key Bank signing on as an early adopter.

Citigroup tested cards developed by Dynamics in October 2012, but by the end of 2012 the cards had not left pilot. Dynamics launched a similar card with UMB Bank in 2012.

Dynamics has one of the largest patent portfolios in the payments industry. When asked whether the company plans to file a legal claim against its new competitors, Dan Gantt, general counsel at Dynamics, said, "Unfortunately, it is Dynamics' policy not to comment publicly on legal matters."

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