Coin: A step in the wrong direction

http://www.techendo.co/posts/coin-a-step-in-the-wrong-direction

by lowglow • 13 years ago

342 185 13 years ago

The hating on Coin is unbelievable. It seems like a great first step towards backwards-compatible card consolidation.

Are there going to be issues with it? Of course.

Will it last in the long run? Well, the phone thing is obvious, kids. I bet these guys are aware of that and have a plan.

Regardless, its an innovative piece of hardware that moves the ball. That's better than any of the shit I've built.

lanaius• 13 years ago

For me part of the issue is that I have enough money troubles where I am in life (and I'll admit Coin isn't probably targeted at me in that case) that I don't have time to worry about there being issues with the device that delivers purchases. I don't need, for example, one of those issues being that something that should hit a credit card hits a debit card or vice versa. When I give someone plastic they can't change the payment account when I'm not looking.

stormbrew2• 13 years ago

Some of the 'hate' is coming from places (eg. Canada) that have already moved on to chip cards (which won't and probably can't work with this) and are now slowly moving on to nfc. It's just already late for this kind of development. 5 years ago? I'd have been all over this. Now? I'm just waiting for Apple to adopt NFC so we can all move forward on better solutions.

cypher5433• 13 years ago

Their FAQ says that future versions will support chip cards.

https://onlycoin.com/support/faq/

ams61102• 13 years ago

For me, it's like the classic Spolsky critique of the "Cue Cat". It's solving a problem that I don't have. I carry a wallet anyway to contain my ID, my cash, and other cards that are not credit cards. Carrying a couple of credit cards along with all that is not a problem.

I personally don't have any hate for Coin or what they are trying to do; I hope they are successful. But it's not something I would buy.

jahewson• 13 years ago

Exactly. Currently in my wallet: a California driver's license, a Green Card, a medical insurance card, and a gym card which works via barcode. There's also a credit and a debit card. Thats's just 2/6 which I could replace with Coin.

omnisci• 13 years ago

Github solves a problem that I don't have, but that doesn't mean it's a bad product right? Not to argue with you specifically, but the concept of "solves a problem I don't have" isn't really an issue. I use Uber frequently because I don't drive (NYC), you may not if you have a car. Is Uber a shitty company? Nope, its pretty awesome, but it solves a problem for a small subset of people. Same with Coin. I highly doubt YC would have taken on coin if they didn't have a large market to go after. Whether or not it applies to me is less important and that seems to get lost in these conversations (which is weird being on HN).

pbreit2• 13 years ago

When it comes down to it, having a few plastic cards is just not that big of an issue compared to the advantages of multiple, simple plastic cards.

mcv• 13 years ago

The hating on Coin is unbelievable. It seems like a great first step towards backwards-compatible card consolidation.

It's a great first step towards consolidating the worst and most insecure aspects of credit cards.

It's not going to work with modern cards, because it can't copy chips. And if you have an old mag-strip card, you should really get a new one, rather than consolidating the old one.

jmduke• 13 years ago

I dislike this article: it seems to suffer from 'perfect is the enemy of good'-itis and willful misunderstanding of how complex -- and difficult -- commerce can be.

The author basically argues that things should be wonderful and easy and the service providers should handle it all (ignoring the difficulties of such a provision):

I should use a plastic card, cheap, easily replaceable, low cost (free in most cases), and my card account should buffer my purchase as long as the combined total of credit/cash in my accounts is greater than or equal to my purchase. I should then be able to place either the entirety of my purchase or parts of my purchase in separate accounts that provide different benefits. (Think, business, flight mileage, cash back rewards, etc) The service should often be smart enough to learn where I move my purchase and do so automatically if I so choose.

and

I believe we should be moving away from cards altogether. I think google wallet, square, and other RFID/NFC technologies are thinking about the future, where our devices are consolidated and integrated with the world around us. Bitcoin, a virtual currency, proves the success of something that exists purely in the aether, and keeping a Bitcoin wallet on your phone is easy.

How is going from 'wallet filled with cards' to 'one card' not a step in the right direction to 'no cards'? Maybe the technology or industry isn't moving as fast as the author would like, but it's entirely hyperbolic to say that Coin's trajectory runs opposite from the author's ideal vision.

Coin's goal is to abstract the ownership of a credit card away from the plastic itself. If you want RFID/NFC to succeed -- as the author does, as I do, and as I'm sure many other people do, then that's a good thing.

(The preorder legality side of things isn't my domain, so I can't really comment on that.)

rickyc091• 13 years ago

The one plastic card approach seemed to describe https://walla.by/the-wallaby-card

jack-r-abbit• 13 years ago

I remember looking into that one time. It seemed like a good idea but I don't recall why I never did it. Maybe because I mainly keep a small set of cards in rotation and don't really use different rewards cards at any given time. It is a nice concept though. I might need to look into it again.

socalnate12• 13 years ago

Agree completely. How did this manage to bubble up to the top of HN?

bitops• 13 years ago

Just to be clear: you are asking how a negative, critical, "this is stupid" article made it to the top of Hacker News?

nulagrithom• 13 years ago

I upvoted both the Coin link and the link against Coin. I find it's an interesting discussion either way.

martingordon• 13 years ago

Agreed.

While the ideal solution to this problem might be server side, as the author suggestions, that is in no way a feasible solution. The card networks are in direct competition with each other, so there's no way you could get a single card with Visa and Amex/MC on it, not to mention there's competition between issuers.

Heck, I can't even get my Chase credit account and checking account on the same physical card and those two are tied to the same user account at a single bank and go through a single credit card network.

I can't wait to get my Coin. I'll probably still carry around the Coin and a backup card, but that takes me down from 4 to 2.

bradgessler3• 13 years ago

Coin is like "Google Voice for Credit Card". Its a layer that sits on top of an old, crusty infrastructure that hopefully crumbles with time, but until then, we have to deal with it somehow.

brettgoldstein3• 13 years ago

Isn't the "old crusty infrastructure" in this case the credit card itself?

It seems ridiculous to try to kill the credit card with... a credit card.

I wouldn't be surprised if Clinkle, LoopPay, Square, or any of the many startups in this space kills the credit card (and thus Coin) before Coin makes its first delivery in Summer 2014.

dakrisht2• 13 years ago

Without a doubt.

Coin actually increases the complexity of an already complex and archaic system.

The product manages to create more headaches for the consumer and the merchant by consolidating various credit cards in a digital device with a nice "cool" factor but lacking any real solution to the many problems associated with the complex back-ends in the payments space.

Conceptually, it's not a bad product, and it sucks that the founders are probably reading hundreds of people slamming their hard work. But it's reality.

chaz• 13 years ago

Google Voice for credit cards is ... Google Wallet. Or at least, it was supposed to have been. Page killed it off before this year's I/O. http://arstechnica.com/business/2013/05/google-kills-its-pla...

dsl3• 13 years ago

Coin is like "Google Voice for Credit Card"

Hopefully not "Google Wave for Credit Card"

dbecker• 13 years ago

I used to work at the Federal Trade Commission, so I'm quite familiar with this particular legal issue. What Coin is doing violates neither the spirit nor the letter of the Mail Order Rule.

The law states that orders must be shipped within the time stated by the company, and there is a default of 30 days if no other shipping estimate is given. In this case, Coin clearly and conspicuously states that they will ship in the Summer of 2014.

If they fail to ship by that time, they are required to offer purchasers a refund. However, the law clearly states that the company can set their shipping timeline, so long as they make the company aware of it.

dsl3• 13 years ago

I don't think the authors issue is with the Mail Order Rule, but instead card processing networks.

Visa and MasterCard will allow you to authorize cards for a pre-order (actually for any transaction, they don't care if it is a pre-order ot not), and then finalize the purchase when you ship. They do not allow you to use finalized funds as a business loan.

nayefc• 13 years ago

What this article suggests is pretty much impractical. The writer clearly does not understand the financial / payments infrastructure. Coin is not perfect, but at least they're taking a practical and pragmatic look on the problem.

sciguy77• 13 years ago

By his logic wouldn't Kickstarter be illegal? Many KS projects charge users before making a product (they use Amazon to process the payment, but the user's credit card is still charged, which may very well be a Visa). I think this is a little silly.

pavlov• 13 years ago

In Finland, crowdfunding concepts are actually illegal for that reason.

If you're collecting money without selling something, you need a license from the authorities. To get a license, you need to be a registered charity.

You can't just say "we'll probably use your donation to build something you might like and may send you one when it's ready".

aclimatt2• 13 years ago

I mentioned a reply to that as a parent above. The difference is the way Kickstarter presents the projects and the terminology they use. They are not asking for pre-orders, they are asking for pledges, and have a very clear disclaimer in the top right about what that means. If the product page itself were to claim that they were pre-orders for a product that couldn't ship yet, then it as well could potentially be violating card agreements as well as the rule from the FTC.

aclimatt2• 13 years ago

To clarify about the pre-order issue: There's nothing inherently wrong with asking for funds to push the development of a product forward. Kickstarter has done a great job of promoting that model, and the world has seen a lot of good come out of it.

However, Kickstarter has also done a lot of work to educate the public about the risk of this type of funding (certainly to their own legal benefit or otherwise), and thus the public can better understand that they are dontating money toward a dream, versus buying the next generation video game console a few weeks before it comes out.

Coin is taking your money to bring a product to market, while acting like that product already exists. Answers in the FAQ like "we don't take your shipping address because you might move" are a willfully ignorant slap in the face, because they are far more likely the ones at risk of going out of business than me moving houses.

If they said very clearly that you were funding a new product with all the inherent risks, like Lockitron did, this would be a different story. But not educating the consumer about what's actually going on is exactly what the FTC is trying to protect against.

samuelkadolph• 13 years ago

Actually this is very much illegal. You cannot charge someone for a product and then not deliver it. Kickstarter doesn't charge you for a product, you pledge or donate to a project on Kickstarter and if it's successful, you get the item(s) for the level you pledged to for free.

alexcroox• 13 years ago

I wonder if they get round that law because they don't ask for your shipping address until they ship the product meaning it's never a "properly completed order"

Semaphor3• 13 years ago

So there is a part where the US has stronger consumer protection laws than Germany? Interesting.

Besides that, why are digital goods pre-orders seemingly allowed?

ozi• 13 years ago

Wrong. Per the FTC, all you need is a "reasonable basis" for an express or implied shipping date.

http://www.business.ftc.gov/documents/bus02-business-guide-m...

jrochkind12• 13 years ago

Well, of course if you charge someone for a product and don't ship it, then you owe them their money back.

I'm not sure there's anything illegal about it if you give them their money back -- I'm pretty sure I've tried to buy something from a seller on Amazon, been charged, it turned out they were unable to fulfill, they refunded. It happens.

Now, if you run out of money and go out of business without giving everyone their money back -- that's still not exactly 'illegal', it's not in and of itself fraud. Companies go out of business with creditors all the time, almost any time anyone does go out of business they owe someone something (I mean, in a sense, that's what makes you go out of business!)

pbreit2• 13 years ago

It's not illegal but it might run afoul of your merchant account terms.

streblo• 13 years ago

It stores data in plain text on your card

So does your credit card

fletchowns3• 13 years ago

Yea but my credit card doesn't have a wireless radio built into it

dylanpyle• 13 years ago

As far as I can tell, the BLE radio in Coin is only used for detecting location, and doesn't expose any card details in any form.

DavidJohnson• 13 years ago

And your credit cards don't lock themselves once they are out of range.

jxf• 13 years ago

Coin is a great step forwards for consolidation, and it will probably make future post-credit-card technologies more palatable. In that vein alone it's a win.

That said, there's lots of reasons to be worried about Coin from a security perspective. But, at least in the US, consumers bear few of the penalties and costs associated with fraud -- only the credit card companies and banks do. So we will likely see significant adoption from savvy consumers and some resistance (or outright revolt?) from CC companies and banks.

martin-adams2• 13 years ago

> Visa requires that merchants ship a product prior to charging any Visa debit card

This is very new to me. This source here: http://usa.visa.com/download/merchants/card-acceptance-guide...

States:

> You should not bill the customer until merchandise has been shipped

That is a best practice, not a requirement.

dnm• 13 years ago

That's an interesting document. One would think that Coin would be used in "Card Present Transactions," however, none of the security features of a real card can be verified using a Coin, since they don't exist. Why would a merchant accept Coin?

danudey5• 13 years ago

This is an excellent point. You could make a series of purchases with your Coin set to your credit card, use an obviously fake signature, then dispute them all. The merchant can't claim that they checked the signature because they obviously don't match, so any merchant that lets you use your card has little recourse in the case of chargebacks.

gergles• 13 years ago

Look on page 13:

> Transactions cannot be deposited until goods or services have been shipped.

martin-adams2• 13 years ago

Very good find. Thank you.

brianmcconnell2• 13 years ago

Two issues with Coin. One is this has been done before, exact same approach, and it did not work out because the card issuers didn't buy in (a credit card is also part of the issuing bank's brand). Maybe that's changed in the past few years, but I am skeptical.

The second issue is it's solving a problem that isn't really a problem. I use two cards on a regular basis. I have others but rarely need to carry them with me. So I can reduce two slots in my wallet to one. Doesn't seem like enough of a benefit to me.

Lastly, I can see all sorts of issues with merchants not knowing what these are, and being wary of accepting them due to perceived fraud risk. Something that reprograms its mag stripe practically yells "FRAUD!".

So I appreciate the technical innovation behind this, but I think they're likely to get dashed upon the rocks. It's a tough space. I thought Google Wallet with Android NFC would be super convenient. It wasn't. I went back to the old fashioned swipe. So its hard to see this catching on with ordinary consumers.

brianmcconnell2• 13 years ago

Another point. If they opt to let consumers copy their own cards without the issuing bank's permission, I'd be very surprised if copying the mag strip is not a very big violation of TOS. If they go the guerrilla route, they'll basically be asking for legal trouble. I don't like to be critical, it's innovative, but I think they'll have a tough time.

mmoriarty• 13 years ago

Agreed -- they could get everything right technically; it's the legalities and the fine print that could be real issues here.

cypher5433• 13 years ago

One is this has been done before, exact same approach, and it did not work out because the card issuers didn't buy in

The card issuers don't have to buy in to anything. You program the Coin yourself using your existing cards.

I use two cards on a regular basis. I have others but rarely need to carry them with me. So I can reduce two slots in my wallet to one. Doesn't seem like enough of a benefit to me.

Ah, the old "It's of no use to me, so what's the point?" argument. You're not the person the Coin is targeting. It's for people who have more cards than they can comfortably carry in their wallet.

Lastly, I can see all sorts of issues with merchants not knowing what these are, and being wary of accepting them due to perceived fraud risk.

I'll admit that I don't shop in many brick and mortar stores, but when I have, the cashiers have never so much as glanced at my cards. Most of the time, the scanner is out of their view anyway. I can see it possibly being a problem if they have to scan it for you (like at a restaurant or something), but I'd be willing to bet that most people just aren't going to care enough to make a fuss about it.

ams61102• 13 years ago

cashiers have never so much as glanced at my cards.

In fact my impression is that in the vast majority of stores now you swipe your own card. The cashier never touches it.

SomeCallMeTim2• 13 years ago

cashiers have never so much as glanced at my cards

Depends on where you shop. Some stores (particularly big box stores -- Best Buy comes to mind) always ask to see the card and ID. If they do, it's a showstopper for it to not be real. There's NO WAY a store with that policy would let you buy something with an anonymous black "card".

Not only does this scream "FRAUD!", it almost certainly WILL be used for fraud, almost immediately on release. Think of how easy it would be to allow a server at a restaurant to "steal" someone's card -- photo and a swipe, and POOF, you can use their card the next time you go somewhere that doesn't look at the card. How long will it be before stores that DIDN'T ask to see it before start asking, and specifically disallowing the use of these fraud-enabling devices?

Regardless, there's no way I'd risk getting to the point of purchase somewhere and finding out at that point they won't accept my card. And I AM part of their target market: I probably have 8 cards in my wallet, maybe 10. It's complicated, but they all have a unique need that makes me carry them.

I'd love to have something like this that "just worked," but I doubt this would be it without orders of magnitude more education and many layers of security protection to prevent fraud -- probably enough layers to be an impediment to people actually signing up to use it (receiving physical mail being required to register a new card comes to mind).

JohnTHaller2• 13 years ago

Ah, the old "It's of no use to me, so what's the point?" argument. You're not the person the Coin is targeting. It's for people who have more cards than they can comfortably carry in their wallet.

The thing is, a lot of the people who don't originally see the use to something can wind up using it later on because they have a need for it (DropBox, etc). This has a built-in usefulness limitation in that it is only of use to people with lots of cards that need to carry them all. Sure, I have 6 credit/debit cards, but I only ever carry 2 in my slim front-pocket wallet. I only know 2 people that Coin would apply to for their use-case scenario and neither of them would carry this device instead of their cards.

I'll admit that I don't shop in many brick and mortar stores, but when I have, the cashiers have never so much as glanced at my cards. Most of the time, the scanner is out of their view anyway. I can see it possibly being a problem if they have to scan it for you (like at a restaurant or something), but I'd be willing to bet that most people just aren't going to care enough to make a fuss about it.

I'd wager that at least 25% of the merchants here in NY would refuse to accept this. Easily at least that many. While many cashiers don't look at your cards when you use them, that's because it still fits the profile of a credit card: thin plastic, bank logo, Visa/MC/Amex logo, magnetic stripe, raised numbers, etc. Giving them something that fits none of these criteria will instantly set off some alarm bells.

bagacrap• 13 years ago

The card issuers don't have to buy in to anything. You program the Coin yourself using your existing cards.

They do define the policies that merchants have to follow, including whether to accept payments from this device.

txttran• 13 years ago

For everyone who is poo-pooing Coin because it's not a digital wallet, please answer this question: How long from now will most merchants that accept credit cards also start accepting an e-wallet of some sort?

I honestly would be stunned if this happened in <10 years. I think we very often underestimate how slow adoption rate is for new technology and how much money can be made by playing nice with the incumbent technology instead of trying to disrupt it from the onset.

jebus9893• 13 years ago

All of them accept online payments. It's really not a big leap to being able to pay for something through their website while in their store and walk out with it. Some places do this now, especially for bulky items, just scan the barcode in-store and they'll deliver it your house.

If I'm carrying a wallet or keys in my pockets in 10 years I'll be pretty disappointed.

Nursie4• 13 years ago

From the industry side of this - online payments suffer a lot more fraud and just generally have a worse risk-profile than traditional "customer-present" transactions.

Specifically online card payments. Unsure about through other processing facilities.

endlessvoid94• 13 years ago

Coin folks, please, for the love of god, ignore these people.

hakcermani• 13 years ago

The easy first step to eliminating cards is to consolidate them into one device. Then make them completely swipe free etc. Square is doing something similar. Invent a small device to handle swipes and then move to Square Wallet. IMO Coin is on to something !

gmjoe• 13 years ago

This article is ridiculous and doesn't even have anything to do with Coin.

The first half isn't even criticizing Coin at all -- it's just saying the author wishing there were even better things. The author says "The problem with these technologies is vendor adoption. It’s not here yet, but it’s on the way." Yeah, it's been on the way for the past 10 years, but nothing's changed yet! I don't see RFID/NFC anywhere I shop. But that's not any reason for Coin not to improve things in the here-and-now.

And the second half has nothing to do with Coin itself either, but is about Kickstarter charging in general.

saidajigumi• 13 years ago

Yeah, it's been on the way for the past 10 years, but nothing's changed yet!

Along with transistor counts, other technologies follow a Moore's Law like improvement curve. Network (bandwidth) technologies are among those, but they have a strong step-function characteristic to their improvement. This accounts for the delay in end-to-end deployment of hardware improvements needed. This also creates a perception of sustained changelessness followed by rapid change (e.g. dialup modems to DSL/Cable).

Any improvement to payment infrastructure suffers from a much more entrenched form of the network upgrade problem. This stasis works to the benefit of companies (e.g. Square) who can provide value without having to move the world. Coin also fits into this opportunity/risk model.

The risk, which that quote hits on, is that Coin is already too late: if a payment network transformation lands too soon, it could leave Coin's bright idea in the dust. In that light, saying "it's been on the way for the past 10 years" is more worrying rather than less.

But there are upsides. Imagine that Coin grows into its meta-card future, eventually supporting EMV[1] as well as easy revocability and reissuance. Lose your Coin? A quick report and it's revoked and all of your cards are reissued onto a new Coin.

[1] Per Coin's FAQ, they do not support EMV, aka "chip and pin", yet. This is problematic for non-U.S. usage: http://en.wikipedia.org/wiki/EMV

dragonwriter• 13 years ago

And the second half has nothing to do with Coin itself either, but is about Kickstarter charging in general.

Well, no, its about a company pretending to be doing normal product ordering but actually doing a do-it-yourself Kickstarter, and how they may fall afoul of various rules, like those of the credit cards they are accepting, in doing that.

tomasien• 13 years ago

Coin is actually a step in the perfectly fine, sideways direction. It keeps everything on the credit card rail - something where there are fees so ridiculous that Congress actually PASSED legislation to limit them - that's amazing.

Stripe, Square, Coin, whatever - they all are just more convenient ways to make fee-based payments.

Why don't we just make payments from our banks directly? Did you know that's not only possible, but extremely easy now AND feeless? What if you didn't have to even give out your account number to merchants, what if you didn't even need to KNOW your account number to make them? What if I've been processing payments like this for 3 weeks now, have processed thousands of payments, and have done so without asking the user for anything they didn't know off the top of their head?

We don't need fees on our payments - if you agree and you're a developer who takes payments, email me @ tommy@thecityswig.com and let's talk. Not gonna try to sell you anything, I need your thoughts.

This is probably the first time you've heard me talk about this, but I'm starting in the comment section here on HN to start getting the pulse. I can't wait to discuss this hear in the coming months!

ryanckulp• 13 years ago

My writeup, echo's that it won't be the final solution but with a different angle (as a stopgap): ryanckulp.com/band-aid-markets

badman_ting• 13 years ago

Maybe. I am more undecided. The thing is totally cool, but I agree about the increased failure points which is why I won't get one. But, if it turns out to work pretty well for people after a while, why not consider t?

briancray• 13 years ago

The infrastructure for plastic cards will be around for a very long time. I think the author is ignoring the very expensive need for infrastructure changes. It's the same reason why everyone isn't driving around electric cars.

kin• 13 years ago

I feel like some people on HN thrive so much on negativity. I don't even think this feedback is constructive.

Look, author has 1 or 2 cards. I have an Amazon card, a Target card, a Debit card, my FSA card, my Company credit card. I have rewards cards that I don't keep in my wallet because I like to keep my wallet thin.

Like it or not, Coin presents a hopeful solution to solving this for me. And don't go telling me I need to reduce the number of cards I have and simplify my life. I don't want to hear it. I just want Coin's product to exist and hopefully my pre-order is helping that.

On a side note, I'm not used to charge first ship later. Isn't Coin YC backed? I'm surprised they need to rely on pre-orders for funding unless that was their financial plan all along.

loganu• 13 years ago

I feel like a lot of feedback could be useful if it was framed differently. Everyone talking about the potential to lose multiple cards at once, or fraud, or theft, or the 8-card limit seems to come at it from a position of snark and sarcasm.

If you're smart enough to realize potential risks, you're probably smart enough to ask if Coin's considered solutions to that use-case, or offer up a suggestion. They've clearly spent more time thinking this through than we have, and I doubt they've detailed everything on a marketing page and F.A.Q.

Personally, I'd be worried about travelling and my phone dying or disappearing and effectively locking my card when that pre-determined time elapses. But I'm sure that could be configured in the app, or workarounds created once this goes live and more feedback comes in. (Web login, a friends' phone, etc.)

As for the product itself, I'd love to see it work. It would solve a problem for me, and I'd happily replace my wallet with two of these and my driver's license. Is it the best technology for solving consumer-merchant interactions? Maybe, maybe not. But I'd rather see 15 companies develop divergent ideas until a clear winner emerges than see everyone forced to Bitcoin, NFC, etc.

chavesn• 13 years ago

It really seems like this author has some kind of bone to pick.

Banks aren't going away soon. Banks are not going to make it easy for third-parties to proxy transactions soon. NFC or other non-card POS technologies are not going to be everywhere soon.

Those are valid hopes or dreams, and I hope someone is working on it. But Coin promises to be a product that will reduce many cards to one now.

And arguing whether a "pre-order" scheme is legal or not is kind of a moot point: Pre-ordering customers show agree to the transaction, and show their intent give Coin their money now for something later -- even if it is forced by law to be done in a different matter.

jebus9893• 13 years ago

Why would banks go away? In the UK Barclays ran a load of ads a year or two back about "PingIt", their app for sending money to phone numbers or paying for things with QR codes.

I mention this because you propose banks as active resisters, but from how I see it they stand to make significant efficiency gains by just maintaining an app and website, as opposed to making plastic squares by the million, maintaining thousands of ATMs, even still printing chequebooks...

ImprovedSilence• 13 years ago

Slight tangent, but I'm pretty sure sending money to phone numbers is pretty much how 90% of banking in Africa gets done, it seems like pretty cool stuff. Also, I have a bank account with PNC, and if I need to send money to a friend, all I need is their email address, and PNC sets up a transfer, and shoots them an email with a link and instructions for retrieving the money/depositing it into their (not necessarily PNC) bank account. Also the whole cashing a check via taking a photo on my phone is a pretty awesome feature.

dennisz• 13 years ago

I agree with the article in that non-card based payments methods (Square) are the future, but we've seen again and again that moving towards the future takes steps (look at tablets - we had so many iterations on tablet computing before we got to the iPad, and who knows if that's even the end all be all).

My point is that Coin is a much smaller stride for the typical consumer; only SV geeks (guilty) are as excited about NFC payments as HN is, and the typical person sees this aggregation of cards as 'technology' that they're much more familiar with. No surprise that it's blowing up.

Just my two cents.

voltagex_• 13 years ago

Australian banks are pretty excited about NFC payments, too.

https://www.commbank.com.au/business/merchant-services/maste...

(Version 1)

(Version 2 & 3)

https://www.commbank.com.au/personal/online-banking/commbank...

Interesting that Android is a first-class citizen here.

bicknergseng• 13 years ago

I agree with the premise but not the details. I want my phone to be my keys and wallet. Coin will consolidate the 3 credit cards I have to one, but I still need to carry a wallet to hold my driver's license, gym card, medical id card, and Clipper. There are (few) cars and after market solutions that allow me to start/lock/unlock my car with my phone, but they feel half baked, and it's not ubiquitous yet... most new cars you can buy in the foreseeable future will come with keys and not an app. Replace my wallet and keys, Google or Apple or Microsoft or (YC company). It's time.

Link-• 13 years ago

This article "is the step in the wrong direction".

I see nothing wrong with encapsulating/combining multiple mediums into one solution. One solution that extends the innate functionality of magnetic cards and provides additional functional layers. The author talks about Bitcoin as being one of the "other" directions in the horizon, I believe that Bitcoin or any other digital currency is on the same level as the magnetic cards. If Coin is able to tap into your Bitcoin wallet and execute transactions, that would help Bitcoin further infiltrate the market.

I also believe that Coin has the potential to provide an extra layer of security that magnetic cards don't.

1) Coin can implement a one click/touch procedure to disable a given card at any point in time and prevent its usage, which currently requires a call to the bank and a bureaucratic nightmare to reactivate the card. (at least in my country).

2) I'm sure Coin are able to implement an approval/rejection transaction workflow adding an extra layer of control in case of unauthorized usage.

3) Coin can add a key based security layer to their application also preventing unauthorized usage.

Really, the ideas are endless and this is why I love projects that are an extension/middle-layer for other outdated technologies.

I think the hate is originating due to a narrow vision of this product's potential.

lsh1232• 13 years ago

Plastic credit card costs next to nothing to manufacture, can be dropped from a 10 story building (good luck finding it afterwards though), can get wet with me in a heavy rain, can be replaced in 24 hours (at my bank) and I have $0 liability if I lose it or someone steals it from me. Compare this to Coin (or other solutions like phone based payments) and you will see that it is indeed a step in the wrong direction though not for the reasons discussed in the article.

negrit• 13 years ago

Credit/Debit Card can be replaced on the spot at some bank.

couchand• 13 years ago

But then I have to go to the bank.

I'd rather have a chip in my arm.

goshx2• 13 years ago

So, this product is new. Nobody has used yet. However, it already got a bunch of bad reviews. Why try to put a not even born yet business down if you are not even competing against it in the first place?

I'd be interested to see a business coming up from the article's author from the ideas he put in the article. But I guess writing a blog post is much easier than investing time and money to build up something new to make some people's life easier.

objclxt2• 13 years ago

Why try to put a not even born yet business down if you are not even competing against it in the first place?

Because if we all just blindly praised every new business that came along and never gave them our true opinions we'd have a lot more bankruptcies than you have now (and that's saying something).

A large number of businesses fail because they have terrible ideas. If you think a business has a bad idea why shouldn't you be allowed to tell them that? Yes, there are businesses that succeed despite of everyone saying otherwise. Good for them - but they're the minority.

frogpelt• 13 years ago

If you think your opinion on a message board carries 5 cents worth of weight to someone who has poured their heart and soul into a business idea, you're mistaken.

In other words, you or me calling an idea horrible on the Internet is not going to stop a bankruptcy. If Coin gets enough preorders they are going to build a product, whether it is a failure or not.

aeturnum2• 13 years ago

I don't have a use for Coin - I have few cards, but the product reminds me of a quote often attributed to Henry Ford, "If I had asked people what they wanted, they would have said faster horses." While I think it's great for people who have many cards, and there are probably tons of customers like that, it doesn't seem that interesting from a tech point of view.

qq662• 13 years ago

The tech point of view is the most interesting! They made a reprogrammable credit card that's the same thickness as a credit card. That's impressive tech whatever your opinion of the utility.

aeturnum2• 13 years ago

I agree their fab process is probably quite interesting!

namuol2• 13 years ago

Coin is absolutely a step in the right direction for one simple reason: it offers a convenient transition option.

Its most immediate use is to consolidate physical cards into one, but its true killer feature is the ability to instantly act as a physical proxy to a digital account (i.e. BitCoin, Paypal).

Do you own a Blu Ray player? It's more than likely to also play DVDs. If it takes a lot of time to get consumers to change over their media collections, I can only imagine how much time it takes to move the financial industry.

Coin is sorely needed.

danudey5• 13 years ago

It can only act as a physical proxy to a digital account which uses magnetic stripes as its primary physical form of transaction.

namuol2• 13 years ago

The data on a magstripe is just that: data. I'm suggesting that digital services could offer you a digital "magstripe" without the need to ship cards.

RRiccio• 13 years ago

This would be like saying, in 1994, that Amazon was a step in the wrong direction for selling books online instead of realizing that physical books would stop existing altogether.

abalone• 13 years ago

"I think google wallet, square, and other RFID/NFC technologies are thinking about the future... The problem with these technologies is vendor adoption. It’s not here yet, but it’s on the way."

The author is incredibly underestimating the difficulty of driving vendor adoption of a new payment system.

Google just spent years and enormous amounts of money trying to drive vendor adoption of Wallet, and has more or less given up on the NFC part.

Square's achieved the most so far, but only by bundling it with its POS & processing service, which not all vendors are going to switch to (or even if they took over the POS world it would take a decade).

Considering that's the crux of his argument, it's entirely unsupported.

Nursie4• 13 years ago

I don't hate Coin.

I do find it astounding that magnetic cards are still the standard in the US though.

jrochkind12• 13 years ago

I am reasonably confident that people pre-order items, and are charged for them before they ship, all the darn time.

For the OP to combine two entirely separate things--1) I think it's a bad solution, and 2) and it's illegal to charge money that way--makes it just seem like he has an axe to grind. Those things have nothing to do with each other. The security issues are at least related to the technology, and he could have brought them together: "I think it's a bad solution because it involves challenges to doing it securely, as demonstrated by..."

But the payment stuff? Come on.

RandallBrown3• 13 years ago

I think the pre order issue is that most credit card companies require that a pre order is just an authorization on the amount, not an actual transaction. The money isn't supposed to change hands until the item is shipped.

Coin is completing the transactions and using the money to fund their venture.

It probably isn't black and white either. I am no expert on credit card transactions.

I'm not too worried. I ordered one.

swamplander• 13 years ago

While you may think this is a step in the wrong direction, that's just an opinion. While NFC / Bluetooth LE would be preferred so I can pay with my phone, that would mean every merchant would need to have a reader that supported that technology. Today only some merchants support paying with QR codes. At the very least, COIN is a killer stop-gap solution, a convenient & technical solution that would work with every merchant out there.

I personally had no issue giving them $55, the same concept behind kickstarter, for the money to produce my goods. Consider me an investor of 1 unit.

drakaal• 13 years ago

I know the OnlyCoin guys, so maybe I am biased, but for me this is about reducing the risk that I don't have a card, or that I leave a card behind.

Combine this with the "you can't sniff my card through my pocket" capabilities and I am very excited.

This is just a troll post by someone who either doesn't understand, or has sour grapes.

shawnreilly• 13 years ago

I am always paranoid when it comes to technology and money, and this will be no exception. BLE (Bluetooth Low Energy) has been around for 2-3 years now, but I still consider it to be in it's infancy. This is especially true when it comes to security. A quick Google Search produced two examples [1] and [2] of potential security flaws with BLE pairing and authentication, and I'm sure there are many more I'm not aware of. Building new payment technology based on new and cutting edge communication frameworks does sound exotic and cool. It's probably one of those "cool points" that gets investors excited. But for the security minded folks out there, this is likely a red flag. Instead I see it as building payment related technology on an un-proven communication framework, and it just does not sound like a great idea. And it is because of this that I will probably never personally use something like Coin regardless of how useful it might be. All it takes is one person to create an effective exploit, and there goes both your money and your trust in the Service. In any event, good luck to Coin with this new Product, and I hope they prove me wrong. If they are looking for a recommendation (which I'm sure they're not), I would recommend a sharp focus on securing the BLE connections between the Coin Wallet and the Smartphone Device.

[1] http://lacklustre.net/bluetooth/

[2] http://eprint.iacr.org/2013/309.pdf

pg2• 13 years ago

"Update: I've been currently gagged/banned from responding to HN comments. Sorry."

For what it's worth, this is false.

lowglow• 13 years ago

Cool. I didn't know if it was a bug or I was actually gagged/filtered, but my reply button disappeared, then later reappeared. Glad I wasn't banned. :)

pg2• 13 years ago

There is a gradually increasing delay before the reply link appears, depending on the depth of nesting of the thread. It's intended to create drag on flamewars.

ruswick• 13 years ago

Coin is a very neat idea that will be hampered by many practical limitations.

How durable will it be? I routinely neglect to take my wallet out of my pocket, and end up putting it through the wash. Can Coin survive total immersion in water for an hour? What happens when my dog invariably decides to chew up my wallet? What happens when I drop my Coin in sand?

Moreover, the cost of a Coin becoming inoperable is far greater than that of a traditional card. Worst case scenario, my bank will send me a new card within a few days, which will cost nothing because the cost of manufacturing plastic cards is negligible. If my Coin breaks, I have to shell out another $100. Unless Coin is as indestructible as plastic cards (which is highly doubtful simply because the mechanics and circuitry in Coin create a level of complexity far greater than that of a piece of solid plastic), It will end up costing me more in the long run.

What about security? If I were to lose a plastic card, the maximum risk I'm exposed to is a single account being defrauded. If my Coin falls into the wrong hands, the bad guy has absolutely everything.

In a perfect world, Coin would be great. Unfortunately, the limitations of modern life and commerce make Coin impractical and even dangerous.

kunai• 13 years ago

What the author of this article just doesn't get is that Coin isn't supposed to be a long-term solution (at least from my takeaway), nor is it something that is intended to completely redefine the vision of future payments. What Coin intends to do is provide a unified interface for payments right now, today. Credit/debit cards are so ubiquitous that it's only natural we unify them. It's 2013, and there's still no comprehensive NFC mobile payment solution. Google Wallet can't really be used on a practical basis, and doesn't give you much security – lose your phone, and you're pretty much screwed.

Coin is most definitely a step in the right direction, and it's a simple solution. One of the hallmark traits of great design is its obviousness -- and Coin's design is obvious. A credit card that can act as multiple credit cards. Who would have thought?

xster• 13 years ago

Pretty link bait-y title. You'd expect an authoritative analysis of the product but half of the article is a Fox News-y "some people don't like pre-paying for pre-order" complain unrelated to the direction of payment systems. The other half is a subjective anecdotal nice to have wishlist on the payment industry. Sound shockingly contrarian and ride the popular topic, old trick in the book.

dataminded• 13 years ago

This makes my wallet thinner. This requires no changes from existing merchants or their infrastructure. I approve.

aaron695• 13 years ago

Not sure why people on HN are up voting an article putting down a new YCombinator.

Even if it's valid, which I don't think it is it's not really what HN should be about.

It's not constructive criticism since it basically writes a company off.

Even the legal issue is BS. So what if it's not 100% kosher if they get away with it, good on them. All companies when they start take risks.

yeukhon2• 13 years ago

Why can't they do that? Just because this is a new startup? Are you saying a hacker news reader have to buy in every startup concept funded by YC? I am sorry, we have freedom to choose to upvote or downvote.

What do you mean legal issue is BS? You can't even use this damn card in Macy because of legal issue.

alexnking• 13 years ago

Somebody better call Kickstarter...

mcallan83• 13 years ago

I wonder how this will work at places that require a card to be signed. On the back of my cards, it says "Not Valid Without Authorized Signature".

KamiCrit• 13 years ago

Would you like a faster horse or a horseless carriage?

weixiyen• 13 years ago

Wow this is my first time hearing about this. Amazing product...

nickstinemates• 13 years ago

Coin is trying to replace your credit cards (no other cards, like ID, Buss Pass, etc) with a single electronic card.

After living in Hong Kong for 12 days, I can safely say they have a superior system for this premise alone.

The octopus card. Accepted virtually everywhere any other card is accepted. It's like any other e-wallet with load, but its ubiquity in service acceptance is amazing.

Everyone has an octopus card. Everyone important to the infrastructure of the country accepts octopus card.

yeukhon2• 13 years ago

No. octopus card is just another card but because people like using it so much places like 7-11 won't mind to have it. You load money into the octopus card (not sure if now banks allow account linking). At least when I was kid that was how things worked.

shadowOfShadow• 13 years ago

Where's the meme picture with some guy laughing as credit cards fall all over him... "What am I going to do with all this access to money???"

I'm just going to carry my bitcoin mining rig everywhere - suckers.

zbinga• 13 years ago

Today I learned that Americans still swipe their credit and debit cards in a magnetic strip reader.

Aradalf• 13 years ago

This is a stupid article. Phone paying systems are clunky. I don't want to take out my phone, unlock it, open up an app, enter a PIN, choose a payment device, and then tap my phone to a payment system to pay, when I can just open up my wallet, take out this one card, and swipe it. Maybe you need to press the button a couple times to switch cards, but that's it.

kayoone• 13 years ago

It might be a step in the wrong direction, but why not let them try ?

In todays world evolution isn't linear, its parallel. Many people work on similar problems at the same time (innovators dilemma comes to mind) and some may prevail, some won't. But thats the process of moving forward to the perfect solution.

sheri• 13 years ago

Coin actually seems like it would be a pain from a usability stand-point. Say I actually put in lots of my cards in there. Now, I go to Safeway, I need to first keep clicking until I reach my rewards card. Then, I need to keep clicking again until I reach my credit card. If I accidentally click ahead, I'd need to loop over all my cards again.

huangc10• 13 years ago

there's one thing I generally agree with the article. Coin is a gimmick. Also, I'm sure there are a lot of people like me who like to carry wallets that are moderately full rather than empty.

zamalek• 13 years ago

This is definitely link bait. Indicate that a YCombinator startup is a waste of time and you are guaranteed to get some hits. Or get upvoted on HN.

I believe we should be moving away from cards altogether. I think google wallet, square, and other RFID/NFC technologies are thinking about the future, where our devices are consolidated and integrated with the world around us.

That's like, his opinion, man. I personally think that cards are going to be around for a very long time whether we want them to be or not; for one simple reason: infrastructure. There are just too many card readers in the wild to feasibly displace the technology. For example, I can't use Google Wallet in South Africa (even though I would love to be able to) because we simply don't have NFC paypoints here. I doubt there will ever be. Dynamic cards seem like a really clever compromise in the direction of that "perfect world," and when I say "world" I mean it - cards are a world-wide technology. NFC is not.

The author clearly has a problem drawing a line between what is feasible and what he wants. We probably all want NFC payments - the reality is that most of the world won't get them.

If you really think about it all Coin are doing is creating a compatible addon for existing card reader that let you use NFC (or BLE, but the technologies are similar) with any of them.

Legality of preordering

I am struggling to figure out how exactly this argument means that the cards are a step in the wrong direction. His one commenter (Alec Joy) also points this out:

For those to lazy, or too trusting of Dan's word to click the link, I would like to present the first sentence of the article he linked to, and suspiciously the ONLY sentence of the response he omitted from his quote. "It is not illegal for merchants to charge for a product before it has shipped. "

Shameless link baiting.

Sami_Lehtinen• 13 years ago

Totally over engineered insecure solution, for already oudated technology. Sounds like a great thing to invest on.

mvkel• 13 years ago

Ironic that this is the same author that praised Square, a technology that brings credit cards to more businesses. He's also not in Coin's target audience. He says himself he only uses two cards. Great! Coin isn't for you.

The technology is here. NFC has been in virtually every Android smartphone since 2011, plus Google Wallet and Apple's Passbook. It's all here, ready to go. Businesses, and consumers, aren't sold.

Regardless of my personal opinion on the crudeness of NFC, the problem is point-of-sale systems are (at least) three years away from adopting these technologies at any level of ubiquity.

Go to your nearest farmer's market, and they're still dealing in cash! Square is doing wonderful things to bring credit card processing to the masses, but _that_ is cutting edge. Coin is the next step on the consumer side.

retr0h• 13 years ago

This looks like the perfect tool for counterfeiting credit cards. Pay my bill at the restaurant, in about 20 seconds, the server can have my card ready for action on their coin.

Coin: A step in the wrong direction

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