The central promise of mobile wallet systems is that you can leave your physical wallet behind and make all kinds of payments and use loyalty cards through your phone. But so far, the promise hasn’t met reality because the systems are limited in their reach with merchants, require big upgrades in hardware for consumers or retailers or don’t allow users to replace all of their cards in their wallet.
But a new product from Cambridge, Mass. startup iCache is hoping to solve that problem with an innovative iPhone case, that can digitize all of a user’s payment cards and loyalty cards and provides a simple and secure way to present them at checkout at all stores. The Geode case, set to debut in May, provides a separate card swipe reader that allows users to enter data from their magnetic stripe cards into the Geode app. Users can also scan barcode-based loyalty cards into the app using the iPhone’s camera. Once the cards are stored, you can leave the dongle and the physical cards at home. The app is secured using a biometric fingerprint reader, which must be used to unlock the app and input cards.
When it comes time to conduct a transaction, users select a card from the app. If it’s a mag stripe card, they can pull out a universal Geode Card from the back of the case, which is temporarily programmed on the fly with the credentials of the selected card. Users swipe as they normally would and the transactions happens as if the original card was employed. Users can decide how long the card stays active before it automatically erases. It can be as little as 20 seconds or can be hours if the user sees that their phone is low on battery. When choosing a barcode-based card, the Geode displays the barcode on an e-ink display on the back that can be scanned by existing point-of-sale terminals or barcode readers.
iCache started in 2007 on a separate payment device that could store a user’s cards, CEO and founder Jon Ramaci told me in a phone interview. But he said consumers balked at the idea of carrying around a second device. But now, with connectivity through the phone and advanced hardware built into the case, iCache is finally able to create a viable mobile wallet that doesn’t require hardware upgrades for consumers or merchants the way that near field communication (NFC) payments do.
“We’ve built Geode so people can use it anywhere, they don’t have to wait for a conversion of terminals to NFC,” said Ramaci, a former managing consultant at Oracle (orcl). “They can use a form factor that is convenient for them and it’s not a change in consumer behavior. They’re still using a card or bar code but there aren’t any security concerns.”
Geode reminds me a little of Dynamics, a company that makes programmable cards that can store a credit and debit card from a bank and adds extra security for transactions. Ramaci said Geode differs in that it can take cards from a number of issuers and also handles barcode based cards as well.
The company, which has been funded by private investors, recently started a Kickstarter project primarily to get some market feedback before the big launch in mid-May. Ramaci said the device will sell for a suggested price of $199 or $159 for Kickstarter backers but he didn’t say which retailers will carry the device. So far, the plan is to start with the iPhone 4 and 4S and eventually the iPhone 5 because it allows iCache to hit a large number of users with one case. Android is also being looked at but presents big problems because the hardware ecosystem is so diverse. Ultimately, iCache is prepared to evolve with the payment technology on the market, but for now, Ramaci said it makes sense to build around cards, which aren’t going away anytime soon.
I think the Geode is an intriguing idea because if it can work as advertised, it gives people a way to slim down their wallets in a hurry. You’ll still need to carry around a license. And cash is still necessary for many smaller transactions. But for many purchases, you can just carry this case and be done with it. The system appears to be pretty secure with its fingerprint reader combined with automatic time-outs for cards. I wonder if the whole process will add more time to a checkout and Ramaci assures me that it’s still very quick. The app highlights recently used cards but users can pull up any card from tabs.
Ultimately, this feels like an interesting interim solution and a somewhat pricey one at that. I think NFC will eventually proliferate and allow people to carry their credentials and use them with a tap. Or there will be cloud-based answers like Square’s Card Case or PayPal’s in-store solution, which doesn’t even need a phone. A lot of these systems are still waiting for widespread adoption by merchants, who are getting inundated with companies telling them to adopt their mobile payment solution. That’s going to take a while to figure out and for some merchants, there may not be much incentive to make an immediate hardware or software upgrade to support any of these systems until one can prove to be more of a standard or provides obvious value over the others. So in the interim, which could stretch for years, a solution like Geode makes sense. Cards aren’t going away and we continue to see how cards are becoming smarter as well. Having a simple way to store and present them all will work for some consumers though at that the current price, others may figure carrying around a thick wallet will be fine for now.