A new mobile payment contender has been making waves the last 48 hours.
It began when TechCrunch’s Chris Velazco wrote an article Tuesday about the iCache Geode.
In short, it’s a high-tech case for the iPhone 4 and 4S that – like NFC devices – gives users the ability to ditch their wallet full of credit cards and use their mobile phone to make payments, instead.
But unlike NFC, it’s a solution that consumers can use immediately, without waiting for retailers to integrate new technology.
So it’s no coincidence that the story has created a lot of buzz. Tuesday, iCache’s Kickstarter campaign had accumulated $6,000 in funding from 37 backers. As of this writing, though, the company has gathered over $127,000 from 572 backers.
An impressive run, for sure. But, while I hate being a negative nelly again this week, I have to say, I don’t really see what all the hubbub’s about.
Geode’s Zero-NFC Solution Explained
First, let’s review how the technology works.
After equipping your iPhone with the special iCache case, you attach a separate dongle that’s used to scan your current credit cards into an app. Then you take a picture of the barcodes of your various store loyalty cards and gift cards to store them in the app, as well.
Once you input all your credit card information, you then select whatever card you want to use for a given purchase. Upon selection, the included universal “Geocard” – housed within the external case – gets rewritten with that specific credit card’s information.
Then you remove the newly magnetized Geocard, which works just like any other credit card.
Gift cards and loyalty cards work a bit differently. Select the one you’d like to use within the app, its barcode pops up on the case’s e-ink display (like the screen on the original Nook or Kindle) and then the cashier scans it like they would the original.
What’s most revolutionary about the technology, though, is that the case comes equipped with a fingerprint scanner that you’d need to use to open the payment application. And since security is a huge concern when it comes to mobile payments, this feature alone could attract a lot of attention from consumers.
So what’s my beef with the technology?
A Novel Idea, But No Homerun
One TechCrunch commenter says, “It’s good ol’ fashion hardware innovation, and it solves a problem without creating massive new ones.”
I’m sorry, but I couldn’t disagree more. Here are a few reasons why…
For one, as far as introducing new problems, I’d say that holding up a checkout line to make sure you’ve got the right credit card loaded and the proper loyalty card on the e-ink display would certainly qualify.
There’s also the fact that all of this high-tech gadgetry is built into a case. As in, the object that’s meant to protect your phone from damage. Not the best place for a credit card programmer, an e-ink display and a biometric fingerprint sensor.
As Wall Street Daily Editor, Ryan Kleeberger, points out, “Looks like you’ll need a case… for your case.”
Now, you could argue that it gives consumers the chance to hitch a ride on the mobile payments bandwagon without purchasing an NFC phone. But that leads me to my biggest problem with the device: It costs $199. Which is more than I paid for my NFC-equipped Samsung (SEO: 005930) Galaxy Nexus.
True, NFC isn’t exactly mainstream yet. But even as a stopgap measure to hold us over until NFC gains traction, the Geode just doesn’t do it for me. After all, mobile payment technology is meant to offer more convenience than using standard credit cards and loyalty cards. Even for temporary solutions.
In the end, I’m convinced that the Geode is actually more of a hassle than just using the credit cards you have now. Not to mention that since you’re still essentially using a plastic card to make purchases, you’re stuck with the same boring technology that mobile payments are designed to replace.
With that said, there’s no question that the technology itself is unique. And we’re always in need of innovative technologies to keep Google (Nasdaq: GOOG) and Isis on their toes.