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Crowdfunding Critic: Spendwallet
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May 23, 2016, 12:13 PM
How many of you still pay with cash when you go anywhere? We're willing to bet that it's a pretty small number -- and if you're like most people, chances are you've got more than a few cards in your wallet, taking up space. If you're looking for a way to pare down what you take along, allow me to introduce you to your new best friend: Spendwallet.

What's the Spendwallet do, and how does it do it?

Simply put, it replaces all of your credit, debit, and gift cards with a single device that allows you to access them all at once. The box itself is meant to replace your wallet, and even includes a small pouch in the back that allows you slide in your ID or shoppers' club and membership cards.

Programming Spendwallet is straightforward. You take your smartphone (both iOS and Android will be supported) and swipe your cards into the Spendwallet app. You can swipe and store up to 20 cards, though it's worth noting that it won't work with cards that don't have a magnetic strip. Once everything is swiped into your phone, you sync it via the app to your Spendwallet.

When you head out to the store and find something you wish to buy, you simply take your Spendwallet and instead of swiping it, you hold it over the card reader and Spendwallet generates a magnetic field that will tell the reader that your card has been swiped. Because you can switch between cards on the fly, you can use gift cards at your favorite cafe, and you can use credit cards at places where you get cash back. Pretty cool, at least in theory.

Who's Spendwallet for? The card hoarders, of course

Allow me to tell you of the contents of my wallet: A single debit card, a single credit card, a school ID, my photo ID, and a membership card to a local rural watering hole, which I use to gain access into a place that has fantastic french fries. That's it. And more often than not, I don't take my credit card, my school ID, or my membership card, unless I'm making the 60-mile excursion from my apartment to my parents' house for the weekend. Occasionally, I have a single gift card, but these almost always are used to make online purchases, not at a brick-and-mortar store. So, much like a couple of the other products I've talked about, I'm not the intended audience for this product.

However, if you would compare my wallet to my mother's wallet, I think you'd see a stark contrast. She's got a card for a personal bank account, a joint bank account she holds with my father, a credit card she uses exclusively for buying gas, a credit card she uses exclusively for buying groceries, a credit card that she uses for work-related purchases, and usually five or six gift cards to brick-and-mortar stores.

At this point, my mother's wallet is roughly the size of a brick, and not far shy of the weight either. She is the person who could benefit from the Spendwallet. I'm willing to bet that everyone knows someone who could improve their lives by consolidating their cards down into a single, easy-to-carry device. Maybe that person is your brother, your significant other, or one of your parents: amybe that person is you. The point is that there are people out there who could easily make use of Spendwallet.

MFE versus NFC

So, you might be thinking "but Amber, I live somewhere that doesn't let me use Apple Pay, what's different about this?" I get that, and you're right. A lot of places are slow to take up Apple Pay -- especially if, like me, you're prone to shopping at smaller stores who don't have the means or desire to adopt Apple Pay right now. To this day, I still haven't used Apple Pay at a brick-and-mortar store, primarily because I don't tend to shop at a lot of the places that accept it. After all, Apple Pay requires card readers that are equipped with NFC (or Near Field Communication) receivers, which is currently used in around 10 percent of retail locations in the United States.

Spendwallet uses a type of technology referred to as Magnetic Flux Emulation, or MFE. MFE emulates a magnetic field that can be read by card reader as though the card had been swiped. Supposedly, it can be used in nearly 100% of retail locations, provided that they have the option for you to swipe your card.

Because I haven't tried it yet, I'm not entirely sure how well this actually works. In the area I live in there are still some places who haven't even set up the "tap-to-pay" that began being implemented about a decade ago (which work off of RFID, in case you were wondering). However, MFE is supposed to be universally accepted, and there aren't any special requirements needed to read the card. I'm skeptical because I haven't seen one in action, but also intrigued if it works as well as it says it does.

Okay, but what about safety?

I, like most of you I assume, got pretty nervous at the idea of putting multiple cards onto a single device. The security aspect bugs me a bit. I'm not a Luddite by any means; I don't shirk using technology to make transactions. Most of the things I buy, I buy online. Like most of you, I've set up Apple Pay on my iPhone (and my Apple Watch.) That doesn't stop me from being skeptical about loading all of my financial assets onto a small, easily lost, easily stolen plastic-and-aluminum rectangle.

As I stated above, I don't have a Spendwallet on hand, so I can't tell you how secure they seem to be, but I can at least echo what the developers of Spendwallet say the device is capable of. They really seem to love the "stealth" design of Spendwallet, stating that people won't know what it is unless they've seen one in action. Personally, I'm not a big fan of the design, I think it looks bulky and utilitarian, and the LED display looks like something right out of the 1980s. Sure, someone might not know what it is, but you're probably going to get some questions when you're waving a fairly sinister looking black rectangle over a store's card reader.

Thankfully, there are some real protective measures in place. Spendwallet will automatically lock if it gets out of range of your phone, and the data is wiped according to your settings. All you have to do to restore it's functionality is to resync your Spendwallet with its companion app. You can also keep Spendwallet locked, requiring a fingerprint or passcode on your smartphone to unlock it. The developers also state that all of your personal data is stored under 256-bit encryption, the same encryption that banks use.

Versus Plastc

I'll be honest, I hadn't heard of Plastc before Managing Editor Mike said something to me -- but after taking the time to learn about it, it seems that Plastc is a pretty formidable pro. I personally think that Plastc looks like a more logical choice. You swipe Plastc like it's a normal bank card, it displays your card numbers for easy reading, and you can store membership and QR code cards because of it's e-ink display. Plastc also holds 20 cards, just as Spendwallet does.

The biggest reasons you'd choose Spendwallet over Plastc? Well, for better or worse, Spendwallet seems a lot more sturdy. Not that I'm speaking from personal experience or anything, but it's not all that difficult to snap a bank card in half if you slide it into your back pocket sans a wallet, so I cringe to think about potential mishaps with Plastc. Secondly, Spendwallet is cheaper. Not just "kind of" cheaper, but significantly cheaper. Spendwallet's early adopter price is $99, versus Plastc's preorder price of $155. The retail version of Spendwallet is $130, where Plastc will jump to $180, with a subscription fee of $50 a year afterward. So yes, there are some advantages.

The downsides

Naturally, there are some downsides. Paying with Spendwallet in situations like restaurants (or any situation where you must hand over the Spendwallet to another person,) could be confusing. Handing the waitstaff your "card" becomes a chore as you'll have to explain to them how to use it, and if you're seated too far away from the register, it could easily lock and erase the data, which is sure to be frustrating for all parties involved. It's also got an internal battery, which presents with the real life horror scenario of being stranded when your "bank cards" are out of battery. Sure, the battery lasts 30 days, but I'm positive that I would still manage to forget to charge it (and probably dismiss the alert on my iPhone,) be four hours deep into a road trip, and realize that I don't have money for gas, food, or a micro-USB to charge it.

My takeaway

Spendwallet is a fantastic idea, though I personally think that I'd be more likely to rally behind Plastc. That doesn't mean that there aren't people who shouldn't consider Spendwallet. The lower price tag and lack of a subscription fee is certainly appealing, and if you're like me and prone to snapping debit cards in your back pocket, the increased durability is a big bonus. I'm interested in seeing just how well Spendwallet works once it hits the market.

If you want to jump in and get one for a reduced price, you can snag a Spendwallet for $99 from their Indiegogo page, as well as check out their other backer packages that give discounts on bulk ordering and options into the beta.

-- Amber Neely (@SurferAmber)

Developers: Are you starting a crowdfunding project you'd like us to take a look at? Shoot us an email and let us know what you're up to.
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May 23, 2016, 12:31 PM
Beside the downside of charging, traditional credit cards are bendable (able to take abuse from big crushing butt) and waterproof (got wet in an amusement park).
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May 23, 2016, 02:47 PM
A lot more people are using cash than you think. I see it everywhere. Cash doesn't tattle on you everywhere you go, giving you some privacy...
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May 23, 2016, 04:15 PM
Interesting contrast to the "I shop at small places that don't accept ApplePay" caveat there:

I do most of my "everyday" shopping at the following list of stores:
- A smallish local natural-foods grocery store
- A smallish local co-op grocery store
- A small local pharmacy
- Safeway
- Costco
- CVS or Walgreens
- The farmer's market

Of those stores, these accept ApplePay (using a standard NFC reader):
- The local grocery store
- The local co-op
- The local pharmacy
- Walgreens

These currently do not accept ApplePay (and don't have their chip readers turned on):
- Safeway
- Costco

These have an NFC reader but have explicitly disabled ApplePay:

And these are cash-only:
- The farmer's market

So by my count, excepting the cash-only farm stands, *all* of the small local businesses I shop at accept ApplePay ever since they upgraded to chip reader terminals last year. None of them advertise this (the employees often don't even realize it's an option), but it works fine.

Meanwhile, Walgreens is the only big chain I shop at that does, and half of the big chains I shop at don't even have their chip readers turned on yet for some baffling reason.

Personally, my iPhone is already in a wallet case, and my goal is to reduce the number of cards in the slots to drivers license, period. Not there yet, but it's getting thinner and thinner.
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