The Start-Ups Trying to Kill the Credit Card

Forgot your wallet? No problem. Coin, PayPal, Google Wallet, Dwolla, and other tech companies are making it easier than ever to live without plastic. 
Coin

The future of money has arrived, and it's called Coin.

It looks like a credit card. It's the size of a credit card. It swipes in credit card machines. But it holds the information of up to eight of your debit, credit, rewards, or gift cards. And you can switch between cards by simply pressing a button.

The new product, launched recently, promises to change the way consumers spend money in a secure and efficient way.

The key technology is a Bluetooth signal. To load information from your different cards, just swipe them on a card reader into your Apple or Android phone and take a picture of the card. If you're too far from your card—like, say, you leave it at the restaurant—your phone gets a notification. And the Coin's battery lasts up to two years.

So, what does it cost someone to fundamentally change the way they pay for dinner? $100. Pre-ordering has already started (at the reduced price of $50), and Coin will ship out next summer.

But this San Francisco company is just one of many start-ups across the country that are finding new ways of developing the future of retail.

Less Money, Less Problems

In recent years, Americans have used less and less physical money when purchasing items. Several don't use it in stores, and many more don't keep bills and coins in their pockets. The "cling" of stray pennies hitting the counter at your local coffee shop may soon become a distant memory.

According to a survey by Walker Sands, a Chicago-based public relations firm, nearly 1-in-5 consumers do not carry any cash on them. In total, more than 60 percent of consumers carry $20 or less in cash. Surprisingly, about 1-in-20 people say they don't use cash and refuse to go to places that accept only physical currency. (The survey was conducted over the last year among 1,046 consumers across the United States.)

And other surveys show a similar trend: According to a 2012 study by Javelin Strategy and Research, 27 percent of purchases in 2011 were made with cash. By 2017, the group expects that number to drop to 23 percent.

So, yes, we're headed toward a cashless society. But what about plastic credit cards, as well?

The End of the Costanza Wallet

People use cash less. Receipts are redundant with online banking. And products like Coin allow people to pay digitally, instead of with a physical credit card. Could the George Costanza wallet be a thing of the past?

Christine Pietryla, the senior vice president of public relations for Walker Sands, said she was immediately drawn to Coin. It's a product that fits into her firm's research: People want their consumer experience to be simpler, easier, and more efficient.

"It's definitely a challenge to find an application or a solution that puts everything all in one place," she said. "This is unique in that it does do that."

Consumers are starting to prefer digital options in payments: According to the same research from Walker Sands, 28 percent of consumers are more likely to use a digital gift card, rather than a plastic gift card. It only makes sense that services like PayPal, a business that allows people to make payments and money transfers through the Internet, have taken off.

Similarly, Google Wallet, launched in 2011, allows users to store information for their debit cards, credit cards, reward cards, or gift cards on their mobile phone. For participating stores, someone can just tap their phone to a PayPass terminal to pay for a product. Google Wallet users can all send money through Gmail attachments. Additionally, Google announced last week that it was introducing prepaid debt cards that can be used in ATMs.

And in the same survey, 95 percent of people say they've purchased something from Amazon in the last year.

Presented by

Matt Vasilogambros is a staff correspondent at National Journal.

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