7 wallets that couldn't stay digital

June 29, 2018 10:56 AM

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In the era of digital and mobile payments, many banks and tech companies have strived to completely do away with cash, checks and cards. But quite a few have had to concede that the market isn't quite ready to give up the physical trappings of payments.

Some of these physical add-ons are short-lived attempts to bridge digital and non-digital payment habits. Others became permanent fixtures. But unexpectedly, this wasn't a temporary growing pain for the mobile wallet market — even to this day, digital payment companies are finding they can't stay purely digital.

This listicle is compiled from reporting by PaymentsSource writers including John Adams, Kate Fitzgerald and David Heun. Click the links in each item to read more.

The Ebay Inc. Venmo application (app) is arranged for a photograph on an Apple Inc. iPhone 5s in Washington, D.C., U.S., on Friday, Aug. 22, 2014. After downloading the Venmo mobile-payment app onto a smartphone, users can connect them to bank and credit-card accounts, and then link up with friends to send and receive money on-the-go. Venmo, based in New York, alone handled $314 million in mobile payments in the first quarter of this year, up 62 percent from the prior quarter. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

Venmo's new cards take a lesson in design

Despite a reputation for being the go-to P2P app of digital natives, Venmo is once again pushing its market in the opposite direction with the debut of a plastic card.

The card follows a move to prune web-based P2P payments, keeping the Venmo experience focused on mobile devices. Even the card's application page directs users to open the Venmo app to reserve one of the limited-issue Venmo-branded Mastercards.

In addition to making retail payments, the Venmo card can be used to reload Venmo balances via ATMs.

Venmo's plastic card went through a first iteration as a Visa card that featured a bland lump of pizza dough as its design, and drew immediate criticism for that choice of art. The new version is a Mastercard offered in six colors, giving it a chance to stand out in the user's wallet. This is no small detail; many credit cards — including one offered by PayPal, which owns Venmo — use colored cores to distinguish themselves visually in the tiny space that's still visible when cards are stuffed into a traditional wallet.

Green Dot's 'checkless' checking account … adds checks

Green Dot bought a Utah-based bank in 2012 to allow it to issue its own cards and offer bank accounts, giving it more flexibility in how it designed its products. One example is GoBank, a digital checking account that originally didn't offer checks (Green Dot added the option for checks in mid-2015, two and a half years after GoBank's launch).

Lately GoBank has been focused on other physical products. A new cobranded Uber debit card from Green Dot’s GoBank unit gives drivers 3% cash back if they choose PIN entry when filling their tanks at ExxonMobil stations, affirming the persistence of PINs in an increasingly digital payments environment.

The Uber Visa Debit card is configured so drivers may select the debit option and enter the card’s four-digit PIN at the pump to get cash back for gasoline purchases with the card. The card offers discounts on a range of other retailers’ services, with no requirement to enter a PIN.

The idea of a perk that requires a PIN is somewhat less common in a world where more merchants are leaning toward streamlined payments requiring no PIN or signature—and as of April 15 signatures are no longer required for card purchases in North America.

The many, many PayPal plastic cards

For a digital payment brand, PayPal sure has a lot of plastic cards.

In April, PayPal expanded payment options for unbanked consumers by introducing the PayPal Cash Card, a prepaid Mastercard debit card funded by users’ PayPal balances.

The PayPal Cash Card is separate from PayPal Prepaid Mastercard, introduced in 2012 by NetSpend and sold at retail stores; and the PayPal Business Debit Mastercard, introduced a few years ago by The Bancorp.

“In an era of mobile technology and advanced software platforms, we can do more to unlock the potential of financial technology to improve the financial health of billions of people across the globe,” said Bill Ready, PayPal’s COO and executive vice president, in a blog post announcing PayPal Cash Card.

The new prepaid card also supports free bank account transfers and P2P transfers between PayPal customers, but there’s a 1% fee to get a payroll check cashed immediately and a 5% fee for cashing other checks. The Bancorp issues the card and Ingo Money supports cash loads at CVS, 7-Eleven and Rite-Aid for $3.95 per reload.

The original mobile wallet dabbles in plastic

Google Wallet, a precursor to today's Google Pay wallet, launched in 2011 — well ahead of Apple Pay and Samsung Pay — and likely was the most in need of a "bridge" product to help consumers transition to mobile payments.

Google began offering a plastic Google Wallet card in 2013, but gave up on the project three years later. The plan to sunset the card, which was uncovered by the website Android Police by examining code in the Google Wallet app, followed Google's decision to split Google Wallet into two separate apps: Android Pay for the point of sale, and Google Wallet for P2P. The company eventually combined both brands again for Google Pay.

Amex's Serve helps telcos launch their wallet

Back when the name "Isis" was still a viable brand for a mobile wallet, the U.S. telcos teamed up with American Express to add a plastic option to their wallet app.

The 2013 deal gave Isis — which the telcos later rebranded as Softcard — a link to Amex's the Serve cards to enable purchases at stores that did not accept contactless payments at the point of sale. Conversely, Serve customers, who would not need NFC phones to transact, could then opt into Isis and use their NFC-enabled phones at the counter.

Executives at both companies said customers would be able to make P2P payments and load funds through direct deposit, among other features.

The move served as a reminder that neither company felt confident enough at the time to conquer digital payments alone. And even with help, the telcos weren't able to succeed; even after its rebranding, Isis/Softcard was eventually shut down.

Square's plastic card gives it a branding kick

Of all the mobile payment brands to add a plastic card, Square may be the one that makes the most sense. It has long since given up on having its own wallet app (though the Square Cash P2P app may take over that role), and its popular mobile point of sale devices still rely largely on accepting plastic cards.

Last year, Square announced that it was opening up its previously invitation-only prepaid card to all of its customers. The product is a Visa-branded card linked directly to the user’s Square account balance.

The Square Cash Card comes in black with white print, allowing cardholders to customize the front with either their own signature or a sketch of their choosing. Square seems to have a fairly high degree of leniency when it comes to designs, but does monitor for unsuitable content.

“If you want to be top of wallet you need to be able to play both in the digital world and the physical world," said Michael Moeser, director of payments at Javelin. "Plus, since only 1 in 10 dollars are spent online, gaining physical POS dollars for digital players like Venmo and Square is pure uncharted territory.”

Coin puts the card first

Critics long questioned the value of Coin's product, particularly at its $99 price point.

When the card was originally announced in 2013, West Monroe Partners surveyed 124 of its consultants about Coin, with more than 70% saying the card solves a real problem, but 68.5% also saying its price was far too much. During Coin's 2014 rollout, its early backers were upset by fulfillment issues and tech changes. Nevertheless, the company soldiered on, adding technology such as contactless payments and EMV while keeping the same basic form factor of its card.

But Coin was one of a slew of multi-account cards from the likes of Stratos, Swyp and Plastc that were forced to adapt to the rapidly changing payments ecosystem — particularly the shift to EMV security — before their products could take off.

Coin made a fresh attempt at a broad mobile payments play in early 2016, forging a partnership with MasterCard, which vowed to use Coin’s NFC-based mobile payments technology to power an array of wearables as part of MasterCard’s Commerce for Every Device initiative, angling to leverage the emerging Internet of Things. According to MasterCard, that partnership is still in place.

The same year, Coin sold off its technology to Fitbit, giving the fitness wearable company a foundation on which to build Fitbit Pay, which debuted in its Ionic smartwatch last year.