The Wallaby Card
walla.by
walla.by
I have a card. It is hooked up to my bank account. It works.
a debit card, a credit card, a backup credit card and my corporate card
I would love a positively fail safe solution to get this down to one card, but to be honest, neither of these top stories offer that. Because at the end of the day, the most common reason for failure in my standard use case is user error on my part.
I am from India, I have multiple cards but most because there is a surge of credit card offers in India, most banks are providing free credit cards and offers to get people signed up.
So many of those cards are just used to utilise those offers to get discounts and a certain select websites for discounts.
But I practically use my debit card, a credit card hooked to online payment services ( paypal et all ) and a backup credit card when I cross the limit of my other credit card. That's all.
One other card I use is just when dining out in which I get some % discount/cash back offers thats all.
It works just like any other card, you just select which one you want to use when you make a payment. Here is an example of how it looks like
http://handelsbanken.fi/shb/inet/icentfi.nsf/vlookuppics/10_...
In the US, a debit card can be charged like a credit card but the funds are obviously deducted from the balance on your bank account. It also lacks the protection and rewards that a typical credit card would have. I just want to clarify that you indeed have two separate things here on one card and its nothing like how the US does it correct?
The selection process is very simple, you just put your card into the machine (almost all the cards nowadays are chip based nowadays but there is also a magnetic reader usually on the right), something like this
http://data.talka.com/files/Yomnani.JPG
then the machine shows amount and you select
1) Credit
2) Debit
Then it asks for pin and that's it.
There are legal differences, too: credit cards are regulated by the Consumer Credit Act, which makes the card issuer jointly liable in many cases. So, for example, if you order a product with a credit card, and the retailer goes bust before supplying it, the credit card issuer is also liable. If you'd bought it with a debit card, you'd be out of luck.
Finally, if your card details are compromised, you've slightly longer to sort things out with a credit card: with a debit card, you could find yourself with no cash at all.
http://www.moneysavingexpert.com/shopping/section75-protect-...
That sounds good and very handy.
The chip based cards ( EMV ) are being introduced in India, rather RBI ( Reserve Bank of India - Controls monetary policy of India) has made it mandatory for all banks to replace the present cards and make them all as EMV.
But its not to merge them but to reduce the frauds.
Acts as a debit card, credit card, ID / Driver's License, Passport, library card, Costco card, etc.
Wish I could replace my wallet with something like that.
If you can shift the lion's share of your purchasing onto rewards cards, you can bank hundreds of dollars per year, especially if you use the card for business travel and expenses. There's an opportunity for that to increase by 2X or more if you can put your purchases on the "best" card.
I know it's not directly related to the consolidation card topic but I even have friends who use their father/mother card using their own signature which I don't think is safe because, even if their parents authorized them to use the card, the usual way to verify that you are really you is through the signature and I doubt nobody checks you signed with the right signature in a greasy reastaurant check, so basically I'm pretty sure anybody could steal your card, use it and you would realize just after seeing the charges on the bank statement.
A consolidation card is maybe a way to solve the problem. Another way which to me makes more sense is not to sign up for every damn card in the country which most of the time end up collecting dust in the wallet.
Most the other cards we carry aren't bank cards, they're Medicare (if we get hurt), drivers license / ID, and RFID cards to get into work or your apartment building (I have 2 of them)... and all these cards, these "one card" startups can't replace.
Unless they can replace my entire wallet with a single card, that works as a drivers license, medicare, debit/credit card, and RFID card for my house, then you're not really offering anything special.
Obviously, Australia is not free™ enough.
But without support for PayWave / PayPass / Chip & PIN, it's DOA in Australia. I want a card I can use when traveling to Europe as well (requires Chip & PIN). And Coin has a sleeker Uber-esque look to it as well - that rainbow on the Wallaby card doesn't exactly say "luxury" or "exclusive". (Not that it has to be, but it'd be nicer to drop a black / carbon card as an early adopter, not a plastic thingy called "wallaby" with a rainbow.)
They don't really have this idea that you should avoid credit, and should you take one it should only be for (hopefully) productive investment, they buy TVs, clothing and food with credits.
Not uselessly using borrowed money for everything can actually hurt you the day you actually need to borrow money because they will consider your econ. 101 attitude (save before buying if it's not an investment) a "risk".
The second way to do this is to take advantage of the grace period. Every purchase you make gives you a roughly 30 day period where no interest is charged. Pay off the full amount during that period and you simply use the credit card service for free. If you do this you end up ahead: typically credit cards offer benefits for using them. For example American Express gives you an extra year of warranty on most items. Lots of them give you cash back (1% or more) or "miles" or "points" you can redeem for various goods. Most cards do not have a yearly membership fee either so you end up getting everything you buy for a small discount.
It is true that some portion of Americans do "carry a balance": do not pay off their balance at the end of the grace period and must pay a finance charge proportional to the amount they did not pay off. However, this is usually not done by choice but out of necessity. I would do this too if for example I had to pay for an emergency trip to see family but did not have enough savings, etc. As long as you pay things off quickly, you are not really getting trouble in terms of losing substantial amounts of money.
Moreover, I think the grace period it still a debt even if it carries no interest, it's the bank tempting people. You can still accrue it more than your account size, it's still borrowing without thinking about what the revenu the spent money will bring.
Debt is a financial tool like others (like selling capital for example), but I really think its use should be restricted to productive investments, and its overuse is a big problem. It's a useful dangerous tool, like a chainsaw, if you're not a lumberjack there is not reason to use it everyday, but it's practical if you make your own wood.
A credit card is not automatic debt. It is a line of revolving credit. Think of it as an abstraction on top of the money you already have on your bank account. Additionally, credit cards provide additional protection, such as fraud prevention and charge backs. Yes you can misuse them but... Don't?
Edit: I guess a better way to phrase that is that a credit card is the ability to take out small short term debt in real time. And potentially pay it off for free.
The only thing I have to do is pay the bill in full each month. I can't imagine letting people have access directly to my bank account.
1. Yes, the US system overall is less than ideal. Banks could take initiative to simplify the system and the consumers probably should demand that they do.
2. American consumers are not somehow more stupid than people elsewhere. Introduce the same incentives elsewhere and people will follow the same pattern. The only reason other countries seem not to get into as much personal debt is mostly because loans are not as widely available and ones that are cost much more. In the US this used to be the case during the majority of the 20th century. Since relatively cheap credit became available, americans started taking advantage of it. This has nothing to do with whether they are smart or stupid.
The reality though is that these programs are not sustainable if fully exploited. Interchange (the fee U.S. merchants pay when you run a card) is under 2%.* A bank can't reward you more than that without losing money. Well, they can make up for it on the interest they charge on debt, but presumably if you're optimizing cards then you're optimizing where you hold your debt too. The way banks make these programs viable is with marketing, tricks, rules, time limits, etc. that make you think you're doing better than you really are.
Smart consumers figure it out. But not everyone bothers to, and so there's enough "dumb" ones to make it possible. Kind of like how gym memberships work.
Long story short: If a service like Wallaby takes off and levels the playing field, then these programs will disappear. So if you're one of those "smart" consumers that enjoys exploiting cards to make an extra buck or two, then you're better off not rocking the boat.
*Europe's interchange is a fraction of that, which is why you don't see this rewards phenomenon there.
See the rates here: http://usa.visa.com/merchants/operations/interchange_rates.h...
Meanwhile UK interchange is no more than 1%.
Perfect example of what I'm talking about. Those figures are based on a certain model of reward utilization which is retarded by rules and limits. If that model changes and more people exploit the reward program, the program will change. The math has to add up.
The point I was trying to make was that we don't have as many rewards programs in Europe because we're behind curve, and they are starting to appear, not because of low interchange.
For example, my Chase Sapphire card gives me 1% cash back everywhere and 2% on restaurants.. all of them. Whereas Santander only offers it at certain chain stores. That's because of interchange.
The prevalence of these programs in the US would have to be attributed to some other factor(s). I'd posit that it is due to the American obsession with credit, and the intense pressure for growth in the US financial industry.
http://www.santander-products.co.uk/banking/calculator/cashb...
So, none of my water, fuel, energy, mortgage or communications providers qualify.
Under the hood it's a promotional scheme with certain big companies.
I pay all my credit cards off monthly, and basically treat them as cash (so I'm not the target consumer of a rewards card, I know).
* I might be biased in terms of people I know.
I also have a company credit card.
I'd want a single card and I'd want one of those sleek wallets if all I had were cards and bills.
What is the problem is all the loyalty cards. I sign up for any loyalty cards even if I don't plan on going back. Design a way for me to have all of them on me, and remind me to use the right one when I'm in the location, and I'm sold. Currently I just leave most at home, leading to under-utilization without careful planning.
Wallaby is both a card issuer and (working with) a processor. The merchant's processor routes the charge to them like a normal card. Then Wallaby selects the appropriate card number and proxys the charge via their own processor to that card's issuer. I.e. the same round-trip transaction, they're just a man-in-the-middle swapping out card numbers. The issuers never see a difference.
Couple issues they'd have to have worked out for this:
1. Getting approval from the card network to proxy a transaction like this. Given the founder's background with Green Dot I can see them having the pull to drive that.
2. Dealing with chargebacks. The merchant will have a record of the Wallaby card number because that's what's swiped through the POS. But the customer will see it on their actual card's bill (let's say Chase). If they file a dispute, and Chase contacts the merchant, there's a card number mismatch. I wonder what their solution is for this. Perhaps they instruct cardmembers to initiate disputes with them and they proxy those as well.
Overall I have to say I like this a little better than Coin, if only because it's simpler. You don't have to make any decisions each time you pay, you just configure it through the cloud, which can actually make smarter decisions for you. And it's not $100.
Either way I'm all for any innovation that thins out the number of cards in my wallet (with the goal being zero.)
2) put your wallaby card into your coin.
3) carry wallaby and one business card
Today just got too meta. Now my brain hurts.
You could use them together. Get a Wallaby as your "one" smart personal card, and if you feel like springing $100 to go from 2 cards down to 1, you've got Coin.
Personally I'd be a tad worried about handing my Coin to a server to charge a big business meal. What if they accidentally tap the button and switch to my personal card when they're holding it?
So this can't be sending a card swiper the number of one of your cards, which means it must be a valid credit card itself. It has to be issued by some Visa/MasterCard/Amex/Discover member-bank to be widely accepted, though none of those logos appear on the website's mockup.
If that's the case, I still haven't a clue how they turn a capture against their card into a capture against one of your "real" cards based on the type of store you used it at. They can't be charging your real cards themselves, as all the charges would come from a single category code, whatever one was assigned to their own merchant account, so you won't get the right rewards. They'd also lose money on every transaction that way, as they'd have to pay card-not-present fees to charge your cards themselves, while only collecting lower card-present fees when you use the Wallaby card.
Puzzling. They must be trying to get some kind of relationship somewhere else in the network that no other company has (either direct relationships with issuers, or permission from Visa/MC to sit on the processing network somewhere and do some kind of MITM).
It's a network switch for cards, basically.
If all charges are from Wallaby, how will it know it's a car rental or groceries?
A "network switch", yes, but not using that particular method. They must be a real-time MITM proxy.
Here's my thought process: the parties running rewards programs are doing it because they want people maximizing their spend a) on the card, because spending -> interest and b) on the items / shops / etc that they are incentivizing, because they have backend deals (such as being the airline that is incentivized, or receiving affiliate fees from retailers with low costs).
It doesn't even seem too ridiculous to me that they would be able to work out 0 fee / passthrough rates with the bigger players based on those incentives, though it would probably be a first!
We (society) have created a complicated game involving credit cards and we have to continue playing the game otherwise we lose. Merchants charge higher prices because they need to pay a 2% merchant fee, then the credit card "rewards" us with 0.5% back. Madness.
If the blizzard of credit card features--cash back, reward schemes, loyalty plans, interest options, perks, airline points--all disappeared, it would be a huge net benefit to society.
I realize it won't get fixed. It's sort of like simplifying income tax legislation. Almost everyone would benefit even if the amount of tax collected remained the same, but there's no mechanism to even start doing it. Same thing here with the credit cards.
TL,DR - I would guess cutting loyalty programs wouldn't lower credit card fees.
http://usa.visa.com/download/merchants/visa-usa-interchange-...
But we didn't create it. Visa and the banks did.
Visa was able to win over so many banks by offering the highest interchange fee. Remember, card network customers are banks, not you, so they're actually competing to raise the fee that merchants pay (interchange) that gets passed back to the bank that issued the card. In a masterful example of leveraging network effects, Visa was able to come up with the highest fee that still had wide acceptance by merchants.
This pissed merchants the hell off. Theoretically it may have increased prices by 2% in general, but it's hard to say. That's part of the "genius" too, it's designed to be a small enough fee to be a rounding error that merchants just eat.
It did have one advantage for consumers: it made Visa accepted absolutely everywhere by further driving its network effects. (And Mastercard too which followed the same model.) As compared to networks like AmEx or Diner's Club, for example.
What happened then is the banks started competing with one another with reward programs. This basically took the margin out of the interchange and returned it to the consumers. But only if they "play the game" and know how to play it well.
So what we're left with is a silly game consumers have to play to get their 2% back, which merchants really hate.
This has been "fixed" through legislation in other countries. Australia for example. But guess what? They did a study and found that merchants did not lower prices. They just kept prices the same and enjoyed an extra 2% margin.
Even a brief thought about it and you can see this is much better than having to go to your bank, withdraw a large sum of money, walk to the shop with that large sum of money.
It helps business, reduces the transaction friction.
I once actually pondered that wouldn't it be much better if the government controlled internet search rather than google. Fairer? Less open to their constant land grabs from other aggregators? No advertising?
Can you imagine what a nightmare that would have been like? What a silly idea that thought was?
That's essentially what you're saying about a different industry.
I was speaking about frilly credit card features that force us to play a complicated game where we pay more for stuff and then get some money back by signing up for the right "reward" card or collecting points or miles or whatever.
Obviously, I'm not suggesting that everything should be cash. Electronic payment systems (credit/debit cards, wire transfer, Paypal, hopefully Bitcoin) are essential of course. (Often badly implemented, but essential.)
Credit card rewards are complex because competing on price only is hard and brutal and if you're dealing with commodities - and credit card access from the issuer side is commoditized - it drives your margins down into unsustainable territory pretty quickly. So people invent all kinds of schemes that they can compete on without getting into direct price competition. I don't see how removing this would be a huge net benefit to society. I like getting 2% back from my every purchase and 5% back from certain ones. Yes, I know these are the same 2% the merchant is charged with, but credit card companies won't work for free. So I have a choice - either they charge merchants less and don't care about me - i.e. don't entice me with rewards and so on - or they charge a bit more and give it back to me as a reward. I personally like it better when they compete for my attention - that's kind of a relationship that usually leads to a better service than "you're not the one actually paying us so we'll take your call in next 2 hours or so".
If we magically switched a perfect/lowfriction payment model, merchants would benefit, and consumers would benefit, but in ways invisible to them; while losing smaller visible benefits - so they wouldn't "see any benefit".
On the other hand, all the infrastructure partners - i.e., anyone who actually can change the system, would lose out on this lucrative rent from the transaction fees.
The only way to change that is by force from above - EU SEPA legislation is in the right direction, but IMHO not enough.
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Seriously though, you could link all of your cards to Wallaby and then store all of them + Wallaby on your Coin. That way you could use Wallaby's optimization when you want to or manually choose the card to use.
Would love to see tptacek's reaction to that line.
I had signed up and was in the second batch of users. First 1,000 users got it for free for life. Next batch got it one year for free.
I never got the card though. Something related to demand was too high and then nothing.
Also this doesn't solve the problem that is being discussed in the coin thread of imprinting and buyer verification for the merchant.
Still, This is the technology that cell phones should be including on a hardware level, not the stupid NFC thing that doesn't work for most US POS. I don't have an iphone or else I'd be contacting them right now asking if I could get in on the action even though I'm about a week late!
What they should do is connect your cellphone account to this and that would allow the carrier verify your identity (if you're on a contract).... I'm sure there's more here that we could do, maybe have an option to silkscreen the your id of choice on to the back of the case...
People this needs to be made to work NOW!! I use the ninja wallet and even that is too big and bulky for me, if I could get rid of the whole thing and just carry it in my phone the world would be a better place!
Hell, I think I'll build one this weekend, just to be included. :)
While not as close to Coin as Wallaby and Echo, it feels like it belongs in the group. Can't wait to see these all in the wild!
1. Dynamics
2. Geode (deadpool)
3. Coin
4. Protean Echo
5. Omne Card
6. GoNow Card
7. Escardgot
8. CardLab (http://www.cardlab.com/Mobile-Payment.html)
9. QSecure (deadpool)[1] Loop - https://news.ycombinator.com/item?id=6737688
I'd like to see some numbers. Are there beta users? If so, how much are they saving? If not, how much does Wallaby predict they'll save their customers? .1%? .5%? 2%?
[Coin a step in the wrong direction](http://www.techendo.co/posts/coin-a-step-in-the-wrong-direct...)
Really interesting concept. Canada, just get it to Canada!
That said, I do think adding an extra level of indirection to any customer/merchant transaction event is a Good Thing. Allow the customer to pay in any manner he chooses that otherwise satisfies the merchant. While doing so in a way where the customer can be confident his payment identity/authorization is not hijacked and repurposed, or reapplied, or TRACKED, without his permission or knowledge. We still seem to be in this era where POS payments are catching up with what software engineers knew at least decades ago would be a smarter solution.