Today’s Forbes Article on Coin takes a fairly negative view of the product because of :
- Fraud risks
- Network Rules
- Consumer Value
I disagree …!!
#1 CONSUMER CONTROL. Banks and Networks will work to beat up Paypal and Google all day.. but they HATE to beat up the Consumer. COIN is doing nothing other than providing the CONSUMER with a capability to clone their card. COIN is NOT breaking any agreement, the CONSUMER is registering their cards with COIN and hence it is the CONSUMER which is the responsible party taking action which may be contrary to their card agreement (not a legal opinion, but a logical one). Issuers WILL NOT (likely) tell consumers “stop that immediately” because consumers will comply.. and hence stop using that card for payment.
#2 Consumer VALUE . I can tell you that a $50 product to consolidate my 20 odd cards (only 8 today) is of tremendous value to me.. This is super cool and at a price point for the mass market.
#3 Networks, Merchants and Issuers CAN’T TELL. There is no way to stop this.. other than perhaps massive EMV reissuance. Do you show your card to the merchant for a POS transaction? Visa’s merchant acceptance rules do NOT specify looking for a Visa BUG on the card.. only validating signatures. I really don’t think that any of the payment networks will care about GOOD customers using Cloned magstripes.. We will never hear Visa or Mastercard come out and openly SUPPORT coin, as the Issuers brand is impacted (Issuers care), but V/MA won’t be concerned about stopping something consumers want (in a legitimate use).
#4 Fraud can be managed. Both for card ownership and for card use. I’m not going into detail here. But think of asking the question “is Tom’s phone next to his COIN card and are they both at the merchant”? Network rules and fraud systems have never anticipated a GOOD customer operating with BAD plastic.. they just don’t care. In my view COIN does NOT present a Fraud problem, it presents a brand/usage problem.
Can you imagine telling 5,000,000 consumers that the $50 product they just bought will not work because … well… we just don’t like having our brand wrapped. My hope for the NEW version of Coin will be a little bit bigger screen to support QR/Bar code generation and ability to hold 100+ cards.. this would stop the problem shown in this pic..
For those of you in UK/EU.. you have a local champion with more advanced capabilities than COIN.. Tedipay (http://tedipay.com/),
Poll below. Will COIN be successful?
[yop_poll id=”4″ tr_id=”55255″]