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Should retailers be paying attention to Coin?By
Coin, a recent innovation in the payments space that combines credit, debit and gift cards into one card, has been making a lot of noise in advance of its first shipments, but the question is whether or not the service will impact retailers and if it is worth their attention.
The first shipments of Coin are not until summer 2014, but there has already been a lot of buzz about the payment card. Coin is meant to make life easier for consumers by taking away the need to carry around tons of different payment cards. With mobile wallets struggling to catch on, perhaps this is the new future of payments.
“People are surprisingly attracted to Coin,” said Paula Rosenblum, managing partner at Retail Systems and Research, Miami, FL. “I’ve seen a lot of buzz on Facebook around it.
“The whole mobile wallet question is interesting — it’s sort of a solution looking for a problem, while Coin seems to be the solution to a problem,” she said. “It wouldn’t be my first choice, but it looks like it’s going to be a winner.
“Will mobile wallets eventually take off? I’m not sure. When I’ve asked consumers touting Coin why they wouldn’t opt for phone-based wallets instead, I get answers that mostly revolve around security concerns.”
While different mobile wallets and payment apps surface every day, Coin is taking a very different approach to the payments space.
The pain point Coin is reacting to is similar to mobile wallets: It is inconvenient to carry around lots of physical credit, debit, loyalty, membership and gift cards. However, instead of merging everything to a phone, Coin is maintaining the traditional card and enhancing it.
Consumers can add all of their cards to Coin by downloading the Coin mobile application and using it with a special attachment that is included with the physical version of the card.
They then take a picture of the credit cards with their phone so that they know which is which.
The Coin app will be available on iOS and Android devices.
The app can hold an unlimited number of cards, and the physical Coin can hold up to eight cards at a time.
After the initial uploading process, consumers can simply tap a button on the Coin card itself to select a specific payment card before checking out. Coin swipes similar to a normal payment card.
Another interesting feature of Coin is that it leverages a low-power Bluetooth signal for added security. If a consumer accidentally forgets his Coin at a restaurant, his phone will detect the distance and notify him.
Consumers can also disable Coin remotely if they realize that they lost it.
This enhanced security is definitely a benefit for Coin users and a great use of Bluetooth.
Since it is a new product, Coin does still have some challenges to overcome, one being price.
If consumers pre-order Coin within the next three days, the price is $55, but the normal price is $100. Coin is trying to build up pre-orders to help subsidize the manufacturing costs in advance.
Consumers will also have to pay for a new card when their current one runs out of battery. They are meant to last around two years, and there is no way to recharge Coin.
According to Ms. Rosenblum, the price is a bit high, but she expects that they will lower it eventually.
Another issue might come up when the United States moves to EMV, a global standard for inter-operation of integrated circuit (IC) cards and IC card capable POS terminals and ATMs, to authenticate credit and debit card transactions.
While Coin may be the new and shiny object of the moment, it is still early to say whether or not it will catch on.
According to Drew Sievers, founder and CEO of mFoundry at FIS, Larkspur, CA, Coin is nowhere near taking the first-place prize in mobile commerce.
“While Coin has some very cool technology, it joins the multi-headed monster that is the mobile payments industry,” Mr. Sievers said. “At this point, there are probably over one-hundred companies trying to crack the code for mobile payments. No one is there yet.
“It’s difficult to say what impact, if any, Coin will have in the near-term,” he said. “There are other companies that are pushing similar technologies that pulse electro-magnetic signals into the reader’s swiper, effectively fooling it into thinking an actual swipe occurred.
“Coin’s approach looks simple and clean, but it’s difficult to say without an actual prototype in-hand.”
With such a fragmented world of mobile commerce, it becomes much more complicated for marketers to figure out where they need to be and when.
Experts have repeated time and again that the thing that will make a mobile payments solution succeed is going beyond the basic payment functionality. While Coin does offer the Bluetooth security feature, it does not seem to offer much more beyond that in terms of opportunity with loyalty and marketing.
“Given that the Coin device itself can’t receive any marketing messages, the platform seems slightly hamstrung when it comes to dynamic, POS-based marketing,” he said. “Because Coin’s device can operate independently of the mobile phone, there appears to be fewer opportunities for marketers since the end-user doesn’t need to pull out their phone in order to initiate a payment.
“Solutions that integrate the phone and payment method into one user interface will have more meaningful ways to create marketing opportunities for the end-user and marketers alike.”
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York
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