In an age where innovation is to be expected at practically every turn, it’s no wonder why so many entrepreneurs are looking towards ways in which to change how consumers handle their personal finances. The days of carrying a number of different credit and debit cards in one’s wallet may soon be coming to an end, thanks to the emergence of Chip and PIN technology. As Chip and PIN cards approach, however, small start-ups are looking towards ways in which they can beat the rush, with relative newcomer Coin getting a great deal of press lately.
Coin is marketing a niche product that could potentially make a rather big splash once it surpasses an initial audience of early adopters. The device is able to store all the necessary information relating to the cards you regularly use and keep in your wallet, all in a single package. Once the information is stored, each card can be accessed via the digital display located on the front of the device, and those who you deal with at the checkout counter simply swipe the card just like any other. It seems like a brilliant idea, but will it truly last?
The emergence of chip and PIN cards
There’s no getting around the fact that Chip and PIN cards are making their way to America, and the effect they’ll have on the way we make purchases will be extraordinary. Chip and PIN cards use a special technology to store information that gets rid of the need for a magnetic strip. Instead of signing, the consumer simply enters a pin once the card (which contains a special microchip) is swiped, which comes along with a number of security benefits.
Visa and MasterCard have already announced that they’ll commit to making the switch to chip and PIN technology, and The Wall Street Journal has claimed that chip and PIN cards will replace traditional magnetic cards as soon as October of 2015.
A tough landscape for Coin
While excitement over Coin is certainly starting to build, there are a number of reasons to believe that the company’s start-up efforts may fail to survive the introduction of chip and PIN cards in America. For one, the influence that chip and PIN technology is likely to have once they’re introduced will be massive. Millions of consumers will end up making the switch feeling as if they have no choice but to do so, simply because the most popular credit card companies in the country will require it. In other words, chip and PIN technology isn’t going to be something that people will be seeking out on their own terms, but instead a necessary switch that will have a major impact on how we make purchases.
Another reason why Coin is likely to have a hard time making it once chip and PIN comes around is because it is in essence a niche product. Unless Coin is able to make a huge splash on the general consumer landscape, it will be not unlike any other device that only a small crowd of people will herald while others will utilize the chip and PIN technology that becomes standardized. Coin is selling their device for $100 per card (if you pre-order you can get it for $50, plus $5 shipping), which is a lot more than what the average consumer will be willing to pay for such technology; especially given other options.
The third reason why Coin may falter after its initial introduction has more to do with the advanced rate in which technology shifts than anything else. Devices such as this can become dated in an extremely short period of time. Take cell phones, for example. After a phone has been on the market for a period of just a few months, new and better technology emerges that renders the device outdated. Some products have the luxury of being able to stay alive for a number of years through updates and the launching of advanced models (think iPhone), but this represents the vast minority of products available on the market. For fledgling start-ups like Coin, breaking through can be an exercise in futility.
Still time for cashing in
Regardless of whether or not one believes that Coin will be able to survive once chip and PIN is around, it’s impossible to ignore the fact that the company still has time to make a fair amount of money with their concept. Even if chip and PIN has a huge impact, it’s fair to assume that it won’t happen overnight. The introduction of the technology on a grand scale is over a year away, after all, and those who are looking for a new solution for managing their cards may find Coin to be an excellent option at the moment.
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Coin also happens to have excellent marketing on their side, not to mention press coverage. The company is being talked about on a variety of fronts at the moment, and to say that it has a good deal of supporters on its side already would be an understatement. Early adopters can benefit from using a referral program, and lower pricing on the device is available. Coin is no doubt doing whatever they can to make as big an impact as possible in a short period of time, and it seems as if they’re doing a very good job.
Security above all else
If there’s anything to be gleaned from the introduction of Coin, chip and PIN and other new options for managing cards and payment information, it’s that people are looking for a more streamlined, simple method to make purchases throughout the day. At the same time, however these technologies and their initial popularity prove that Americans are ready for a more secure checkout experience, especially considering the prevalence of fraud and other issues associated with credit cards. While time will tell which technology wins out in the end, the days of magnetic strips, security flaws and fumbling for the right credit or debit card may soon be coming to an end.
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