A lot of companies have pegged Near Field Communication or smart cards as the payment method of the future. However, many of those systems rely on expensive upgrades for the consumer or the retailer. And various platforms have made it difficult for consumers by requiring different apps, dongles, cards, or other doohickies. The startup iCache may have the perfect solution to the e-wallet problem -- one that doesn’t make anyone invest in new equipment or technology. That has to be music to any retail CIO’s ears.
The Geode, the new product from iCache, is a smartphone case (currently only for iPhones) that can act as an e-wallet. It comes with a small scanner that lets you swipe all your credit and loyalty cards. Once you have them set up, you can leave them behind.
An e-ink screen on the back of the case can display the barcode of your loyalty cards, so any store can scan the code as usual. Even more importantly, the Geode comes with a removable smart card that looks just like a credit card. You select the card you want to use with the Geode app, and the device temporarily programs the card with the information normally encoded on your credit card. You swipe the smart card as you would your credit card, and the technology already in place at the point of sale doesn’t know the difference.
The whole thing is secured with biometric scanners and in many ways is more secure than your usual wallet. If you lose your phone, someone finding it can’t use your credit cards, because the information is encrypted and protected by the biometrics -- unlike normal credit cards, which can often be used online or with lax security in retail stores.
If you can get by the annoying music, here is a good video about everything the Geode does. It does seem rather impressive, and it is very attractive.
From the point of view of retailers, especially their CIOs, this must seem like an ideal solution -- no new costs, no new infrastructure, no new platform war. But there are some issues to work out.
For one thing, as simple as the video makes it seem, I suspect a Geode transaction is slower than one with a wallet. If I want to buy a cup of coffee with my debit card, I just pull out the card. I don’t have to unlock my phone, open the apps, put my finger on a scanner, pick the debit card from the menu, and then slide a smart card out of the phone. Sure, some hipsters could do that and still text about where they’re going on Saturday night before anyone was bothered. But eventually, we want an e-wallet solution that works for everyone. Anyone who has ever been behind a person counting out pennies for exact change or writing a paper check knows how that’s going down.
Another issue is that, even though iCache says the Geode is universally accepted (because it is essentially the same thing as a credit card), don’t bet on it. When this thing comes out in the second quarter, how many retailers will let you use it the same way as your card? I’m often asked to show the clerk my card for a $5 purchase. Imagine if, instead of a card with a Visa or MasterCard logo on it, I showed her this black thing I whipped out of my phone? Granted, with some training, clerks could get used to the Geode. But it will require new procedures, and retailers will have to be convinced that this is as safe as normal cards or safer.
Price is also an issue. With the e-ink display and the scanner, this is going to cost more than your usual smartphone case. And it may be fragile. How many broken e-ink displays do you want to have fixed for your e-wallet? There is no information yet on the potential cost, but I suspect the Geode isn’t going to be super cheap.
These issues can be overcome. The general idea of looking for a way to use current infrastructure is really smart. I think this or something similar could be the future of the e-wallet. The smart retail CIO will work with iCache and companies with similar ideas to make this happen. It will save a lot of trouble and cost.
What do you think? Would you want a Geode? Is this the way retail should go with e-wallets?