Are we giving up on mobile payments already?

Paying for things with our phones takes a backseat to innovative new debit cards

Aren't credit cards supposed to be obsolete by now?

A credit card is basically a slab of plastic with a strip of VHS tape glued to the back. That magnetic tape holds a few numbers and letters which identify the bank, the account, the user and other minor data. Plus, everything an unauthorized user needs to buy things with your credit card is easily readable on the front and back of the card.

Google's Wallet
Google's Wallet

Credit cards are incredibly low- and dumb-tech, easily "hacked" and easily copied, lost or stolen. When the card is compromised, the user has to call, wait on hold, then after a painful conversation of verification with a call center worker, has to wait days or weeks for a replacement card to arrive.

Each account has its own card. So if you have 10 accounts, you have 10 cards, forcing you to carry around a George wallet.

Meanwhile, the smartphones everyone carries around are more powerful than the fastest supercomputers of the 1990s.

So why aren't we using smartphones to convey those numbers and letters stored on the magnetic tape of our credit cards?

The reason for us all to miss this enormously beneficial opportunity is as dumb as the credit card and as old as the industrial revolution: The industry won't agree on standards.

As a result, the previously slow momentum toward mobile payments and digital wallets is becoming slower still, and in its place, companies are creating better credit cards.

Why credit cards? Because everyone agrees on the interface: the stores, the banks, the users -- everybody.

The trouble with mobile payments

A huge number of companies are involved in turning smartphones into credit card killers: Dwolla, LevelUp, PayPal, Google, Square, Apple, Facebook, Lemon, Isis, Venmo, Bump Labs, Groupon, Zipmark and others.

Mobile carriers and credit card companies are involved, too. In fact, many of these players are carving out standards and alliances that prevent any mobile payments system from being usable by all consumers at all stores.

QR codes are slowly being replaced by NFC (near field communications) as a way for phones to communicate with point-of-sale systems. Yet today, only a tiny fraction of mobile payments are conducted via NFC. Apple has rejected the technology completely, claiming security concerns.

So if you embrace a mobile payments solution and try to pay with things with your phone, most stores won't accept it.

For consumers, the whole mobile payments scene is a confusing mess. So they're sticking with credit cards.

And that's why credit cards and credit-card like devices are experiencing a renaissance.


San Francisco-based startup Coin is creating a new crowd-funded product and service called Coin. In a nutshell, Coin is a simulated credit card. It's a storage device like a credit card is, except it can hold the data for several credit and debit cards.

Like a regular credit card, the Coin card will have your signature and name on it. And it can be swiped and used like a conventional credit card. But that's where the similarity ends.

You use a mobile app to load credit card information from your other cards, or use an included device for swiping your cards to duplicate their data into the Coin card.

It can be preordered for $50, but it will eventually cost $100 per card when it ships next summer, according to the company.

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