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Meet Coin, a startup creating a universal credit card

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As the contactless payments technologies from Google Wallet(s goo) to Isis flounder, critics point to what now seems rather obvious: Silicon Valley is trying to fix a system that simply isn’t broken. Swiping a card through a point-of-sale magnetic stripe reader is easy and it works in millions of locations. In fact, the mobile payments companies that have been most successful, such as Square and PayPal(s ebay), aren’t necessarily trying to change that basic transaction – they’ve just made it possible to use your plastic in more places.

Kanishk Parashar learned that lesson the hard way. The PayPal veteran developed a smartphone wallet app in 2010 called Smart Market that went nowhere. But now he’s founded a new company called Coin that isn’t messing around with the fundamentals of the basic credit card swipe. Instead it’s building a better credit card.

Coin card sunglasses

The Y Combinator-and K9 Ventures-backed startup has created what amounts a universal credit card that can reprogram its magnetic stripe on the fly to match any card you load into it. It will work not only with credit and debit cards but gift cards, loyalty cards and pretty much any plastic that can swiped, Parashar said.

Coin is the size of a standard credit card, and has an interface that lets you cycle through your stored cards. A small screen displays your name, expiration dates, card security codes and anything else a merchant needs to verify the transaction with the exception of a signature.

kanishk parashar, founder CoinThe device connects to your iOS or Android smartphone through Bluetooth, but a connection to the phone or to the internet isn’t required to use Coin. Its app is used as a means to load new cards (through an accompanying mag-stripe dongle) and manage the cards already stored in Coin. The device uses 128-bit encryption to secure all data stored and transferred, but it also uses Bluetooth as an additional layer of security. If your Coin loses radio contact with your phone, it will lock up and send you an alert. You can unlock the Coin with a code in case your phone battery dies, Bluetooth conks out or you leave it in the car.

The device has an internal non-replaceable battery that Coin claims will last two years. It’s also designed to take a lot more abuse than your regular credit cards, Parashar said. It’s shock and water resistant, and its strip won’t demagnetize in the presence of magnets, other credit cards or electronics, he said.

Though Coin has seed funding, as a hardware company it still needs to raise funds for manufacturing, Parashar said. It’s launching the product with crowdfunding, hoping to raise $50,000, though it’s not taking to Kickstarter or Indiegogo. Instead it’s taking pre-orders for the device on its website. The first backers will get the device for $50, though it will retail for $100, Parashar said. He expects the first shipments will go to buyers next summer.

I’ll give Parashar credit. Coin’s a novel concept. Unlike other mobile payments companies Coin’s not trying to replace the leather wallet with a digital one. But it’s trying to make that physical wallet a lot less bulky.

58 Responses to “Meet Coin, a startup creating a universal credit card”

  1. Just Freaking GREAT! Now every waiter in the world can clone my credit card in under 30 seconds, and start using the clone instantly.

    This will make credit card theft BOOM. For only $55 anyone can buy this onlycoin device and start cloning ANY credit card they have in their hands for 30 seconds or less!

    From now on, we have to walk WITH the waiter and WATCH our credit card, to make sure he does not clone it!

    Thanks a LOT

  2. Can’t we stop all the bickering of whether or not it will be accepted. The fact is, majority of consumers always carry their smart phone device and a wallet. If they need to see verification, we can simply take our smartphone out of our pocket that has all of our original cards scanned in, as well as a picture of our license, and show the merchant. Simple fix for those complaining or wondering if this will pan out. I think it is a much needed and revolutionary idea. I replace my wallet from overbearing cards much more often than 2 years. A durable, secure card will likely surpass the cost of the device and outweigh having to replace a bulky wallet( about once a year), which costs around 25-30 dollars anyhow. this idea will be more widely accepted by male consumers for the simple fact that men own wallets and not purses. Capacity/space does not become a reason to buy for many women. I’d be interested to hear all of your opinions.

  3. Anthony Zorn

    Agreed this is a great idea, hopefully he will get enough press to promote it properly. The reality is that whenever we go out on the street to eat, shop or visit and ATM we need to swipe, this reduces to ONE CARD what we need to carry. Consolidation of devices is and has always been one of the strongest and most consistent drivers in technological development, this follows that illustrious path. I wish them luck and have placed my order as a show of support!

  4. Nice concept. However, a problem will arise when you need to complete a transaction with your card without a card reader available – an online purchase, for example. Having an app on your phone like Card RUI is a third party solution, but Coin will want to come up with their own. Or perhaps they have already; maybe all the data uploaded to the card from your phone is still accessible and visible from your phone? If so that’s great, but they need to speak up about this issue.
    That alone wouldn’t keep me from pre-ordering but the Coin card’s lack of real world experience will – does everyone believe, swipe for swipe, the Coin card will work every time a good old fashioned one would? I won’t take that chance blindly. I’ll wait and see how that turns out…I was literally almost left out in the cold yesterday when the subway card reader wouldn’t read my card – which was the only method of payment I had with me at the time, that ONE card.

  5. I would tell anyone interested in paying $100 for this, don’t do it, you’ll be sorry! Both MC and Visa have already mandated EMV for the US starting in 2014. These folks didn’t due their due diligence apparently.

  6. Chip and pin will never be standard in the USA, and is also outdated as mag and here’s why. All major USA retailers and banks today desire real time in depth marketing analytics and internet connected anywhere anytime anyone true multi-factor secure transactions. Today always on internet connected means smartphone based. Paypal mobile, Isis, and now Coin offer these extra commercial features without the average customer having to be aware what goes on behind the scenes to protect them from fraud and provide valuable marketing data. Think about what Coin really offers, Transaction based GPS, POS proximity, cell phone UID, PIN number (or iPhone fingerprint), remote wipe(user lost it or bank closes your account), timer lockout if physically stolen, one time use card numbers(similar to chip). This in addition to the already 20+ existing fraud detection algorithms that are in MasterCard/visa’s network adds new data dimension for marketing analysis. At the same time preserving the huge investment in legacy mag card readers with security far beyond chip and pin..

  7. Matt Redmond

    This is an idea I came up with and kicked around briefly almost 15 years ago. While I was developing the idea and looking into a patent, I discovered that Motorola already had a patent on it – #6,206,293.

    I hope these guys licensed this from Motorola or there will be courtroom action soon!

  8. John Card

    Coin should be free, guys. You’ll figure this out pretty soon. There are other ways to make money on this thing. General consumer is reluctant to pay anything for the payment vehicle. With a price tag attached it will not pass after early adopters

  9. baggyrabbit

    Swipe is barely used outside of the USA. Pretty much only chip and pin is used in UK and other EU countries. Also what about security, swipe is inherently insecure hence chip and pin and NFC.

    Saw some guys are doing something similar but with NFC and with a bunch of other features.

    • I agree, this opens up a whole new ease of credit card theft. Not to be the pessimist, but whenever your card is out in the world, now someone can swipe it onto their phone, snap a photo an suddenly they have an inconspicuous way of paying using any number of different cards under a multitude of card holder’s names. (I would hope to assume they have an identifying number with each Coin. If someone were to try to use your card, you could simply notify your banking institution and they could collaborate with Coin to trace down the owner of that particular Coin device. If this were the case, then I would actually feel more comfortable carrying the Coin around in lieu of physical cards.)

  10. This is a great idea, and to me it seems clear that this is the future of credit cards. The card is there; nobody’s going to be freaked out by swiping something unfamiliar when the money goes through. People have enough to worry about without causing a fuss over a new credit card. I want one, my friends want one, Rob’s friends want one – it’s brilliant and I would invest if I could.

    There are a couple things that they’ll need good solutions for, like the waiter problem above, but nothing insurmountable.

  11. I’m not sure I understand what this is solving. PayPal already solved this issue. They have all your credit cards and debit cards on file. The merchant just needs to accept PayPal and you are done.

    I doubt many merchants (I know I wouldn’t) would accept a bunch of numbers you throw at them without the card being present. The whole point of a card present transaction is that the card is physically there. Have you ever walked into a store and just wrote down your credit card number and handed it to the cashier? Unlikely. Also, I’ve had my credit card duplicated in the past using what was probably a similar device. At least they probably made their fake card look like a legit credit card when they robbed the stores with it.

    • Paypal didn’t solve the issue.

      An issue is not ‘solved’ until it has adoption. People obviously don’t want to adopt to what Paypal is doing because it’s not widely used as of yet.

      When I showed everyone Coin at my office today, almost all of them wanted to buy it right then and there. Obviously Paypal hasn’t had this appeal for whatever reason.

      In my eyes, they’ve hit a homerun. Now, not saying that there won’t be bumps ahead.. security and usability of course will be a big issue.

    • Kevin Fitchard

      Hi Jack,

      Good question. I know Coin doesn’t lock down immediately so I think you have some leeway, but what if the bartender takes your card so you can start a tab. After a few minutes it turns into a brick. :)

    • Kevin Fitchard

      Hi Admin, Nick,

      I asked the CEO about chip and pin for when and if they go international. He said they’re focusing on the U.S. market for now, but that adding chip emulation capabilities to Coin would be possible. We’ll see. As you guys point out the whole point of the chip is to ensure the card is actually there.

  12. Will merchants treat it as a card not present transaction? Also the security issue has me…so the device autolocks itself if you do not receive the bluetooth signal to go back and retrieve it? Can it be hacked? What are the dangers of it being hacked, and is there a mode in place to notify the credit card companies at one shot that the device has been lost?

  13. Gil Black

    It may not be accepted in many places, but like Adam said,
    keep 1 emergency card for those that won’t acept it. Lately I have yet to be asked for ID or have the cashier even look at the back of my credt cards. And with many merchants not even requiring a signature for charges under a certain amount, as long as the card processes they are satisfied! I ordered 2 of them!

  14. I like the direction this is going. I’m not sure if they mention an on/off button so it will shut off the magnetic strip so those butt skimming gadgets pulling the mag stripe through your pants become obsolete overnight.

    Also if the onboard data is encrypted so if it gets stolen/lost, we call the institutions and cards replaced long before anyone can hack the coin and the data.

    Only concern someone may have are the flight loyalty cards to get priority boarding by showing the card at the gate. Hardly a major concern.

    Oh and 1 other concern, Outside the US like Canada that have chip cards increased security (Why it isn’t pushed out in the US is beyond me) I doubt coin would benefit them but it’s a great first step in the right direction overall.

  15. John Selden

    There are still stores that ask to see a photo ID to use a credit card. Coin doesn’t seem like it would work in such a situation. That seems like a pretty big problem with the “one card to rule them all” concept.

    • Kevin Fitchard

      Hey John, good point. Coin isn’t claiming to replace the driver’s license, but there’s a question of whether merchant is going to buy the name flashing across the Coin’s digital read out. Then there is still the issue of a signature. If a merchant is trying to match a signature with the one on the back of your card, well there’s no back of the card…

        • Kevin Fitchard

          Yep, I bet there are a lot of merchants that would just look at these things and say “We accept Visa, Mastercard and Discover. What the hell is Coin?” I think the days are still very distant that we can walk around with a single gadget, whether it’s a smartphone or universal card, and expect to actually pay for the most of the stuff we need.

          Still, it’s interesting that the barriers for entry are a lot lower for a device like this. Take Isis. It just launched nationwide, but I can’t use it (I have an iPhone). Most of the merchants I go to don’t use Isis, and as we’ve seen in trying to use Isis a lot of merchants who supposedly accept it don’t know to process a transaction. With a device like Coin you’ll still have a big market acceptance barrier to overcome. But at least the actual physical infrastructure is in place.

          • Kaleb Simmz

            the coin is simply linked to visa, master card, or discover. I have never had anyone ask to look at my card before I swipe it. so why would using a coin all of a sudden be a big deal? coin is not a credit card company. the coin literally programs the mag strip to display the data of whatever card you have. so if the store takes visa and your coin has a visa attached to it. everything is good.

      • Agreed this is something of a problem, but I don’t think it’s a deal-breaker. I think I’m going to order one (to along with my SimpleWallet that is on its way). My plan is to have three cards: driver’s license, Coin, and my main credit card – just in case. Anything with a strip (including the main cc) will go on coin, any non-essential non-stripped stuff will be left out, and stuff like Costco which they like to see for entrance will go in the car … I don’t use it that often anyway. Hopefully, all of that will mean a much thinner wallet, with little reduced functionality.

  16. Will anybody want to pay $100 for something that has always been free ? Why on earth provide the really out-dated mag-stripe, is there anyone still using that ? Seriously !

    • This is a good point. People who will jam 5″ smartphones into their pockets no matter how bad it looks aren’t going to understand the value of paying $100 to consolidate the space of a few credit cards. Geeks will go for it because of the nerd-appeal, but I don’t see broad acceptance.

      • And how exactly does a 5″ smartphone look bad in my pocket? I don’t wear really tight jeans so my 5″ phone fits in my pocket just fine. Now about coin. It would have to be a whole lot cheaper before I buy it. I think the most I would pay is 25 bucks.

      • Jammer Man

        I agree – this product is going to be some fringe nerd-toy, but will never see broad acceptance in the retail market. Merchants would be under no obligation to accept a Coin card in lieu of the actual card.

    • Yes Steve, almost all face to face credit transactions are still done with a mag-stripe. Why would they provide it? Because it’s easy and it’s accepted.

      And last I checked the price was $55. Would I pay $55 to consolidate all my cards onto one card forever? Absolutely.

      Any more questions?

      • The EU and many other parts of the world are quickly moving away from mag stripe and requiring a smart chip. The mag stripe is highly unsecure and really needs to be moved away from. The US will be slow, but will move that way as well, so a device like this will not be a “forever” device; it will be a 5yr-10yr at max device, with rsales almost nearly all in the US.
        And , as a merchant, I wouldn’t take it as there is really no way to proove to me that the card number you are using is really yours unless you show me the original card or a statement (that still doesn’t fully prove it obviously, but provides at least reasonable due-diligence).

      • Stephen Matrese

        It’s $55 if you pay now to get it next summer, but then it will be $105.

        Also, out only lays two years, not forever, so it’s $55 four the first two years and $52.50/year ($105/2 years) after that.