Friday, 21 April 2017

Plastc Melts Down - Multicard Payments Just Too Hard


Plastc seemed like a remarkably straightforward idea: a credit card which can pretend to be any of your other cards and reduce the amount of plastic in your wallet.

The company bypassed traditional funding methods and offered its devices as pre-orders at $155 a pop, Enough people were interested to generate a reported $9m. Unfortunately that wasn't close to enough to make it to market, so today the company closed its doors and announced it would be filing for bankruptcy.

So a number of lessons here. Fintech is hard. Payment Card Industry compliance measures are strict. Payment technology is a moving target. Banks are behemoths for a reason.

Most importantly, credit cards are free, and Plastc was expensive. It's rare to get rich when you're competing with free. 

Plastc intended to mimic the magnetic stripe of your existing card in order to mimic the card itself. The arrival of NFC meant that was an outdated model. The further arrival of Apple Pay, Android Pay and Samsung Pay - all of which allow you to stack your phone with multiple virtual cards - meant the game was up for Plastc.

Interestingly the collapse resulted from failures to attract the interest of venture capitalists, who presumably saw all of the issues and walked away, a rare outbreak of common sense there then.

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