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A mobile payment startup called Edge recently bought out the assets of Plastc nine months after the company filed for bankruptcy. Edge plans to incorporate Plastc’s technology into the company’s own smart card.
Plastc was in the process of developing a smart card which would house all of your credit cards in one single piece of plastic. Plastic collected $9 million in unfulfilled preorders before filing for bankruptcy last April, claiming they couldn’t acquire the necessary funding.
Peter Garrett, the CEO of Edge, says that Plastc’s built-in customer base and touchscreen technology was worth investing in. He said that Plastc had a problem tying everything together in time to ship the cards to its customers, which gave way to its demise.
Plastc was not the first startup to fail in its attempts to create an all-in-one credit card; the company Coin shut down its operations last year as well. However, Coin did manage to produce a card but was acquired by Fitbit, which then incorporated Coin’s technology into their smartwatches.
It remains to be seen whether Edge will be able to follow through on the smart card dream, but there are several roadblocks it will have to overcome. First, the company will have to receive buy-in from all the major credit card companies, which they have yet to do.
And because the company will be working with so much financial information, they will need to put strong data security practices in place. They will also need an updated app that will stay in touch with the smart card.
Plastc received its pre-orders in 2014, and Apple Pay, Samsung Pay, and Android Pay have picked up some momentum since then. Many consumers already use NFC-based mobile payments so it’s unclear whether they’ll be interested in a purchasing a smart card.
Edge also has their work cut out for them when it comes to winning over the trust of Plastc’s 60,000 pre-order customers, many of whom never got their initial investment back.
Garrett admitted that all-in-one cards are challenging endeavors for any startup, comparing it to “creating the first iPhone.” But in spite of these challenges, he is still hopeful for the potential of smart cards.
According to Garret, the switch to NFC-based payments has been slower than expected. And while he acknowledges that the shift seems likely, he adds that there is probably “…a good five to 10-year window before that happens.”
Unlike Plastc, Edge plans to rely on private equity rather than money from pre-orders and they hope to begin shipping cards in the next seven months. And while Plastc backers won’t receive an Edge card for free, they can sign up to receive a $50 discount which will cut down on the card’s $199 fee.
Author: Andrew Rombach
Andrew writes engaging and informative content for readers looking to find information about topics such as student loans, credit cards, personal loans, and small business financing. Andrew’s work has been featured in Market Watch, Bankrate, The Penny Hoarder, and the Lacrosse Tribune.