Ignoring the shift to EMV

Swyp’s universal credit card launches just in time to become obsolete

Sunnyvale startup Qvivr is is building a universal credit card named Swyp , competing with the likes of LoopPay, Coin and Plastc, but it’s adding its own unique twist. Swyp is a “learning” credit card that tracks your habits in order to surface the right card at the right moment, without you have to flip through your digital wallet.

Like its competitors, [company]Swyp[/company] lets you load your plastic cards into a special digital card-sized device that can emulate the magnetic stripe on any credit, debit card or gift card. A retailer simply swipes the Swyp at a point-of-sale terminal just like a regular credit card. As with most of those universal cards, only one set of credentials is active at any given time, requiring you to select the appropriate card on your smartphone or on the device’s interface before any transaction.

But Qvivr claims it has developed background smarts that can make that selection for you. Its algorithms analyze your purchase behavior, so for instance it knows to use your gas card at the filling station or your debit card at the grocery store. Qvivr said Swyp can also work on schedules, prioritizing your business card during work hours and your personal card during evenings and weekends.

Swyp app

Qvivr said it will sell the device, along with its accompanying card reader and Android or iOS app, for $100, though its taking a limited number of pre-orders on its website for $49. In all, it’s a smart looking device with a few unique twists that would have been an ideal purchase for a gadget lover – if Swyp had launched a year ago.

Unfortunately, the timing for the Swyp card’s commercial release is this fall, which just happens to be when the U.S. retail industry is making a major shift toward smart cards using EMV technology. As Swyp relies solely on today’s magnetic stripe technology, it’s effectively beginning its journey to obsolescence before it’s even on the market.

I asked Qvivr about this, and the response I received was that Swyp will eventually tackle the EMV transition and that it has the technology to do so, but it’s not focusing on EMV in its initial card because “merchants won’t upgrade for a few more years.”

While it’s true the complete transition away from mag-stripe transactions will take a while, Qvivr is far downplaying the significance of EMV (which is named after its backers Europay, [company]MasterCard[/company] and [company]Visa[/company]). In Europe and other regions of world EMV transactions using chip-and-PIN and chip-and-signature methods are already standard. In the U.S., banks are issuing new chipped cards this year and many merchants – from big box retailers to Square sellers — are upgrading their point-of-sale gear to support the more secure payments they promise.

Square’s new EMV-equipped Reader
Square’s new EMV-equipped Reader

Yes, come the October deadline, every retailer in the U.S. will still be able to take a mag stripe card payment, and every credit card will still have a magnetic stripe. But if a retailer accepts a mag stripe payment on a card that has EMV capability, that merchant will be on the hook for any fraudulent purchases.

MasterCard estimates that by the end of 2015 half of U.S. credit and debit cards will have smart chips in them. Not only should stores want to take them for liability reasons, but also consumers should want to use them because the data on those chips in encrypted.

While Qvivr is right that its card will still be usable long after the shift to EMV commences, by using outdated technology it’s essentially holding its customers back while the payments industry moves forward.

This post was updated at 9:20 AM to reflect that Qvivr is the name of the company that manufacturers Swyp.

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