Digital payment is waiting in line for when credit cards die

Many companies are jockeying to replace your bulky wallet. The iPhone’s Apple Pay is catching on. There’s Google Wallet, too.

Now, there’s the Stratos. A single, flexible, plastic card that can contain the information of all of your credit cards.

Stratos CEO Thiago Olson is proudly showing off what he likes to call a “computer” card.

“What we’re really doing is what the iPod and iTunes did to your CD collection,” Olson said.

It looks like a credit card, but he says it’s more secure because it doesn’t have any personal information on it.
You could also say the Stratos suffers from ‘separation anxiety.’ It disconnects, or shuts down, when it’s out of range of your phone’s Bluetooth signal.

“The stripe on the back of the card has a metallic look to it and it can actually change,” Olson explained. “So one second the Stratos is swiping as your American Express card, the next second it’s your debit card, your loyalty card, your gift card.”

The card is so smart, it can actually let you know if you’re near a store where your card can be used.

“I’m walking into Macy’s and my Macy’s card is an example of a card I probably don’t carry in my wallet. I leave it at home,” he said. “But now you can have that store digitally on the Stratos app on your phone. You tap the card twice when you’re near Macy’s, and it goes, ‘Oh, you have a Macy’s card, do you want to use that?'”

Some may call that smart. Others might say “dangerous.”

One person who won’t be getting the card right away is Christopher Budd, Online Security Expert with Trend Micro.

“We shouldn’t think of this card as a credit card. We should think of it as a digital wallet. So losing control of this is more like losing control of your physical wallet,” Budd said.

While the Stratos smart card does disconnect when away from your phone, Budd does make a good point – it’s untested.

But the alternative, our current swipe and pin cards, aren’t really much better.

“The credit cards that we know today, that we’ve been using for 40 years, are going away,” Budd said. “There’s no doubt that in the financial industry and the technical security world that those cards are not suitable for today’s security threats.”

Despite his skepticism, he admits that along with Apple Pay and Google Wallet, Stratos probably is the next popular payment method.

But Budd said you can still count on cash being king.

“One thing that I think we’re going to see in the next few years is a resurgence in cash because everyone knows how cash works. But there’s also the point around privacy with cash. Because cash transactions don’t leave a record the way credit card transactions do.”

The Stratos smart credit card ships in April and because it’s first-generation technology, Olson anticipates an update by sometime in October.