Just when you thought you've seen the last card payment idea, lo and behold there's another one. I'm fascinated with how many startups are in this space.
I submitted a link to this one a month ago that went nowhere; they're getting traction today because the Coin story in the morning spurred interest. Some of today's links are products announced in 2012.
Of course, it's great that it's compatible with existing systems.
It'd be nice if the part that's making payment is disconnected from my phone so I wouldn't have to hand over my phone to someone else. A potential short term solution would be to allow me to lock my phone with a pin and still have this work.
A lot of merchants want to see the physical card when making payment. I'd imagine many would be skeptical of something like this.
It's really nice to see all these ideas trying to crack the payment code. Keep at it!!
The case is the size of a phone, because it's a phone case. If you prefer something smaller, their first product is a 1.5" keychain fob.
The end-goal of Loop and other tech like it is to make your phone (or smart watch) the only device you have to take with you when you leave home. You'll be able to pay for anything, use your store reward/loyalty cards and open the doors to your house with it. I'm almost there myself -- I don't carry keys, my supermarket has an app for the loyalty card that scans my screen instead of a card, I can pay at lots of stores with Google Wallet by tapping my phone on the credit card terminal, and my drivers license slips between the phone and its case.
The only thing nobody's done yet (AFAIK) is replace the "intelligent key" fob for my car. I can't start it without that.
That seems to be their secret sauce. It's not NFC as that would not be compatible with existing mag-stripe readers. It has to be some method of emitting magnetic fluctuation.
In the video they mention that they 'broadcast' it, I suspect that means they are actually pushing out a straight magnetic signal which seems to the reader that a card has been swiped.
I don't think it could be NFC, as most merchant readers wouldn't have NFC built in.
It also explains why they need the special case or dongle, it doesn't appear that it can work with just your phone alone.
It's a pretty innovative hack, but on the security issue, if you card is broadcasting it's data, then I assume anybody can pick it up, but they would need to be REALLY close.
Take something like the free the Square magstripe-to-audio converter, record a swipe. Clean it up and/or amplify it, connect the Square reader as headphone output, and blast the recording as loud as necessary to induce the read in a nearby swipe reader. Security-wise, "the magnetic field will generally fall off as the cube of the distance from the magnet".
Loop is a great hack, but my only concern with this system is that merchants in Europe are many times obliged to ask for the buyers' ID when paying with mag stripe CC. This means that users need to have their physical CC at hand at all times. I know this ID thing is not the case in the US but this can be a legal issue in Europe.
On another note, does anyone know why the US has not transitioned to chip and pin cards?
Yes, and at least in Finland the merchant has to inspect the physical card to see that the name on the card matches the buyer's ID. (In practise it seldom happens.)
I would probably carry the fob around simply to replace all the loyalty/membership cards that take up a large proportion of my wallet. It won't replace my credit/debit cards as they have chips but my less secure cards don't require the merchant to verify physical card or name etc.
I just got back from Europe where I used my mag stripe card quite a bit. In the UK I was asked for an ID almost 100% of the time and merchants seemed do a good job of actually matching data, and then matching my photo id to me.
In France it was hit or miss, I'd say maybe 25% of the time I was even asked for an id for a transaction.
Considering merchants' reaction to NFC is already somewhat uneasy, I'm not really sure how this would work out.
After using (and attempted using) NFC in many places, I started feeling like NFC as a replacement of credit card is not a right direction considering it doesn't really solve the problem of credit card (other than not carrying so many cards with you) especially when you can use a credit card for just about any purchase big or small.
Perhaps the only way these can take off is if you can approach as "NFC as extension to cash" which may be why it was embraced widely in Japan for instance, where micro transactions (and some extent, any transactions) with credit card is somewhat discouraged.
I prefer the security and convenience of having only two cards, a debit and a credit card. Unfortunately for many, making it even easier to use their cards will simply load them up with debt.
I don't think that's legitimate. It seems incredibly unlikely that having to use multiple different physical cards would ever be a barrier to someone who was going to get into debt.
I worked for a mobile/online payments company in 2011, and the industry has huge potential for disruption. The transaction volume is so high that even a slice of a slice means huge returns. Cross one border and the regulatory/compliance landscape changes dramatically too.
The winners in this space are typically those who can get the most device manufacturers, banks, visa/mc/amex, and merchants to play nice.
Here in the UK (and I think much of Europe) we stopped using the mag strip and switched wholesale to Chip and PIN in around 2004. What's more I live in London and I'd say I now complete >75% of my purchases using the paywave contactless payment system. I guess most point of sale devices still have the mag strip readers on them, but I can't see people going for this in a big way here ... its a cool hack but it seems like its sort of hacking a payment technique that's a decade out of date.
All the merchants have excited reactions but there is a camera in the room and I'm sure they've been told what's going on. I think if I were to pay like this somewhere, the reaction would be more like "wait, did you just hack my payment system? Please stay here while I call my manager."
32 comments
[ 3.6 ms ] story [ 16.2 ms ] threadIt'd be nice if the part that's making payment is disconnected from my phone so I wouldn't have to hand over my phone to someone else. A potential short term solution would be to allow me to lock my phone with a pin and still have this work.
A lot of merchants want to see the physical card when making payment. I'd imagine many would be skeptical of something like this.
It's really nice to see all these ideas trying to crack the payment code. Keep at it!!
The end-goal of Loop and other tech like it is to make your phone (or smart watch) the only device you have to take with you when you leave home. You'll be able to pay for anything, use your store reward/loyalty cards and open the doors to your house with it. I'm almost there myself -- I don't carry keys, my supermarket has an app for the loyalty card that scans my screen instead of a card, I can pay at lots of stores with Google Wallet by tapping my phone on the credit card terminal, and my drivers license slips between the phone and its case.
The only thing nobody's done yet (AFAIK) is replace the "intelligent key" fob for my car. I can't start it without that.
See the video at the kickstarter at about 2:30
I don't know much about magnetic strip card technology, so I'm curious to know whether a malicious user could capture the signal and replay it.
It's still not clear to me how the card data goes to the POS equipment, is it NFC or something else?
I'm surprised they mention so many people tried and failed... this approach seems fairly intuitive.
I don't think it could be NFC, as most merchant readers wouldn't have NFC built in.
It also explains why they need the special case or dongle, it doesn't appear that it can work with just your phone alone.
It's a pretty innovative hack, but on the security issue, if you card is broadcasting it's data, then I assume anybody can pick it up, but they would need to be REALLY close.
http://www.instructables.com/id/Read-any-magnetic-strip-card...
http://van.physics.illinois.edu/qa/listing.php?id=419
On another note, does anyone know why the US has not transitioned to chip and pin cards?
In France it was hit or miss, I'd say maybe 25% of the time I was even asked for an id for a transaction.
After using (and attempted using) NFC in many places, I started feeling like NFC as a replacement of credit card is not a right direction considering it doesn't really solve the problem of credit card (other than not carrying so many cards with you) especially when you can use a credit card for just about any purchase big or small.
Perhaps the only way these can take off is if you can approach as "NFC as extension to cash" which may be why it was embraced widely in Japan for instance, where micro transactions (and some extent, any transactions) with credit card is somewhat discouraged.
The winners in this space are typically those who can get the most device manufacturers, banks, visa/mc/amex, and merchants to play nice.