Payments Blog • 4 MIN READ

Could the digital card save your wallet?

John Dunne

Written by John Dunne

Hands up anyone whose wallet or purse, is straining to contain the ever increasing number of cards we struggle to carry around? For all the advances in FinTech, we are still left with a multitude of cards to carry. Well, strain no longer, because digital cards are seeking to solve this problem by consolidating all your credit cards into a single physical card.

By digitally loading your cards to a single plastic card, similar to how a smartphone loads up cards within Apple Pay or Android Pay, you can reduce your wallet space immeasurably. What makes a digital card different is it's a real physical card with a magnetic stripe and chip in it. It looks, feels, and behaves exactly like a regular credit card. The security features are also comparable to credit/debit cards. Once you load all your cards in, you can dynamically select the one you want to use.

The first digital card on the market was made by a company called Coin. They created a product that could store 8 credit/debit cards. It had a dynamic magnetic strip on the back that was reprogrammed to whichever active card you'd select. The process to load up cards required you to install an app on your smartphone and use a dongle to swipe the credit/debit card. The digital card would communicate with your phone using Bluetooth to get everything set up. Once the setup process was completed, you could just take the digital card and use it for your purchases.

While Coin was first to market, there are a number of competitors that have addressed Coin's weaknesses. A product called Plastc stores 20 cards instead of 8. It also doesn't require you to use a dongle to swipe cards into your phone. Instead, you just take a picture of the card and it's sent via Bluetooth. The Plastc card has a digital ink display so when you select a card it dynamically shows up along with a picture of your face and signature. Whenever you hand the card over to pay for something, it's very easy to verify your identity. Plastc has a significant advantage over Coin because they're EMV capable. By contrast, Coin has yet to bring their 2.0 product into the market to support EMV.

Another company called Swyp (pronounced swipe) launched their cards earlier this year. Some of their features overlap with Plastc. If the Plastc card is out of range from your smartphone for a certain amount of time, it automatically deactivates. Swyp took a different approach—they wanted to make a card that still works even if you don't have your phone with you. They allow users to enter a PIN directly on the card to activate it. They also have an iPhone application that stores digital receipts just in case you need to deduct an expense.

These digital cards are still credit card sized devices with a battery, magnetic stripe, EMV chip (in some cases), and Bluetooth technology. It's an interesting dynamic, because I have previously talked about people not wanting to carry physical cards anymore. I think this technology is going to be challenged by modern payment providers like Apple Pay. Digital cards do have a handful of advantages, though. The principle advantage is that you don't need to enroll in any other technology. The devices are simply cloning your own credit cards onto a small device.

It becomes very handy when the check comes at your favorite restaurant. You can simply put your digital card in the bill for the waiter to process. You can't do the same thing with Apple Pay if the check is processed by the waiter in another room. It's also very handy for people who are going somewhere without their phone. Unlike Apple Pay, these digital cards also have the ability to use a magnetic stripe. That might not be such a big deal at points of sale as we move to EMV and near field communications. It does make a difference when you stop at an ATM to get some cash out. (Heaven forbid you make a payment that isn't electronic from the get-go.)

Topics: Payments

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