:format(webp)/cdn.vox-cdn.com/uploads/chorus_image/image/63706920/coin-card.0.1462605880.0.jpg)
When the Coin card was first revealed in late 2013, I was intrigued.
“I’d start using it tomorrow if I could,” I wrote.
The startup promised to let people store all of their credit and debit cards on one electronic payment card and toggle among any of them with the tap of a button. It sounded like magic, especially at a time when Apple Pay hadn’t yet launched and the idea of paying in stores with your phone seemed like it was facing a dead end thanks to Google Wallet’s troubles.
Payments industry buffs were quick to list the reasons Coin wouldn’t make it, and I noted a couple of potential obstacles as well. “Maybe business owners will freak out and refuse to accept the card for some reason. Maybe there aren’t enough people who have the big-wallet problem that I do,” I wrote.
But there was one potential challenge I didn’t think much about: That the product would just flat-out not work a chunk of the time. And that was my experience when I received my Coin card in June, about a year after the startup originally thought it would start shipping its cards.
Over three days, I tried to use the card at four different establishments. It only worked at one: The sandwich shop, Pret a Manger. But even there the cashier had to swipe it three times to get it to work, and only persisted through the last swipe because I asked her to.
The card also failed to work at a Mexican restaurant near my home, a BJ’s Wholesale Club where I swiped myself at a self-checkout lane and at a cafe in downtown Manhattan — though the employees there were captivated by this futuristic, battery-powered card.
I had an equally difficult time getting the payment information from my traditional credit cards onto the app, which then transmits the information to the Coin card via bluetooth technology.
Coin sends customers a little plastic dongle, or credit card reader, to load their card info into the app. It took me 20 attempts to get my first card swiped onto the app, and I only got it to work after swiping the card the other way, opposite from what the instructions told me to do. It took five attempts to get my second credit card loaded into the app.
This obviously won’t cut it for a device that currently costs $117.50 including tax and shipping and handling charges, or even the $55 that early customers like me paid.
Last month, I ran the issues I experienced by Coin CEO Kanishk Parashar. While Coin admits that there are some payment terminals that the card isn’t compatible with, he told me that my experience was a rarity. Less than 0.2 percent — or just 66 of 33,000 customers who had received their card — had complained about card acceptance, he said.
If that number is right, a decent chunk of of them have taken to Facebook and Twitter to complain about this in the three months since Coin started shipping. (You can also find examples of happy customers on social media and the company makes a point of highlighting positive anecdotes, too.)
Parashar said my card may be faulty and offered to replace it, which I will probably take him up on. He said in a follow-up email that the startup will send a replacement Coin to anyone else who has a faulty device, too. But he also indicated that Coin expected to produce some faulty cards because of the volume of devices it was manufacturing.
“A big part of doing mass production is stabilizing each unit so it performs as well as we want. When you build tens of thousands, you get some variability,” he said. “With us, you’re holding the thinnest wearable ever made so it kind of tests limits of those tolerances. Over time, as we figure things out, we’ll make that variability smaller and smaller.”
He said the company was making hardware updates at least every two months, which means customers who received their card first may have a card that doesn’t work quite as well as those in the back of the line. The company is producing about 10,000 cards a week.
As for the bum card reader, Parashar believes “issues will subside as we improve the UX on how to use it.” He said a user interface upgrade was coming sometime this month.
What’s clear beyond my experience is that the demand for Coin overwhelmed the startup. The company had been planning for tens of thousands of orders, Parashar says. Instead, the company has received around 350,000. That meant the initial plan to manufacture the cards in a facility in the U.S. went out the window when it was clear the volume that plant could produce would not be enough. That was an unexpected complication and a big reason for the year-long delay on shipping.
What’s not clear is why Coin kept accepting preorders when it was clear they were already unable to keep up. I asked Parashar this in a phone interview and there was a long pause on the other end of the line before he answered.
“That’s going back and trying to have 20/20 hindsight,” he said, finally. “That’s a hard one to answer.”
“It’s been way, way harder than we imagined,” he added.
Even without these problems, Coin has a long road ahead. Many stores and big retail chains have been updating their checkout equipment to accept credit cards embedded with microchips, which are harder to clone. These cards have been popular in Europe for at least a decade, and they’re going to become the norm in the U.S. over the next couple of years. The Coin card doesn’t have one of the chips, which could present a problem at some stores if a business owner doesn’t want to allow a non-chip card. Parashar says Coin has been working on a solution and should announce something soon.
Parashar also says that Coin can prosper even if mobile payments services such as Apple Pay, Android Pay and Samsung Pay take off.
“While Coin looks like a credit card, it’s actually a mobile device,” he said.
The point I think he was making was that the software platform Coin has built to hold a variety of different cards can be valuable even if the form factor has to change.
For now, though, the 50-person startup will continue to find itself facing a whole lot of doubters. Especially if customers continue to experience the problems I did.
“We’re a startup, man, doing something new,” he said. “Some people say we can’t do it. That’s fine. It’s up to us to keep going and make something useful.”
This article originally appeared on Recode.net.
