Tap Versus Swipe

certainly not. In fact, many ways that we exchange money these days are really really technological. Yeah. In fact, uh, the vast majority of the way money changes hands has nothing to do with any sort of physical currency whatsoever. Yeah, I never actually carry cash on me. But we've never really talked on this show about how credit cards work. Yeah,

that's true. And uh, and so we actually put forth that we're going to do an episode about smart cards and smart technology and NFC and credit cards and asked if anyone had any other questions. We did have response Chase, our buddy, Chase said, be sure to talk about coin. Don't worry, Chase, we got you covered. And you you may be thinking, but what about traditional magnetic stripe cards? And we are totally not talking about those today. Now, well, well,

well here, here's all you need to know. Okay, there's information that's related to the credit card account you have that's located on that magnetic stripe. You can have a reader that reads that information when the stripe is pushed past it that that actually has that little magnetic field that can generate the information necessary for the processing of

the payment. But really we wanted to talk about some of the more advanced technologies will probably at some point go back and actually talk about the development of that magnetic stripe tech because we were so dependent upon it for so long. In fact, in the United States we're

still very heavily dependent upon it. And actually that's why we wanted to do this episode about NFC technology because in j Nuary of some forty million US Target customers Target the brand the store, the store um had their

credit card information stolen during a hack. And in February the news broke that Congress and the major credit card companies here in the States are are finally in agreement that America should move to these smart credit cards, which I'm sure has the rest of the world just snickering at us, because this is technology that exists in other places and has existed in other places for decades. Yeah, in fact, so much so that it's become part of

of just like the general UH language. I remember watching this little tangent here, but I remember watching an episode of that Mitchell and web Look, which is a comedy sketch series from the over in the UK, and at one point there is a comedy duo vaudeville team called uh Fish and Chip and they're breaking up. That that's their last names are Fish and Chip. That's adorable. But Chip breaks up to go and join up with a guy whose last name is Pen, so it's Chip and Pen.

I had no idea that that was a thing when I saw this pen are. Yeah, I didn't know that Chip and pen was. That was just that's the shorthand for this technology of a chip that's inside a credit card and a pen a personal identification number that you used to fully fulfill a transaction. I didn't know that. I just was like, oh, so you're going from an established pairing of things to something unusual, And then as the joke continue, like no, this must be a thing.

And again it just shows how in the United States we're way behind on this technology. Yeah, so master Card and Visa have both set themselves a deadline of October to roll this technology out to their customers in the US. But but, but let's let's go back a little bit. What exactly are smart cards? Where does this NFC? What what is NFC? Where does all this technology come from? An excellent question. NFC stands for near field communication, which

we've talked about on this podcast before. But you know, it's good to have a refresher. And near field communication is just a type of short range radio transmission. It's it's not in itself some sort of brand new technology that we had never thought of. It's just a very specific implementation of radio waves. Right, It's not like not like some brand new weird energy that glows orange in

the dark or something. Right, And what's actually special about it is that it's extremely short range, like like ten centimeters or less. Yeah. Yeah, ten centimeters tends to be what people say is the maximum transmission distance for most implementations. I think technically it can go up to around twenty centimeters depending upon how you build it into your technology.

But for the for the applications we're thinking about, ten centimeters makes the most sense, because you're actually talking about exchanging information between two very small devices that can be brought into proximity with one another. So it's not the sort of thing you want to be able to broadcast across a country, let alone a room, certainly, which you is why usually we don't talk about very short distances being special in technology, but but this is, this is

one of those rare occasions. And uh, it's it's also good for transmitting small amounts of information. Yeah, it's not designed to move lots of data very quickly. In fact, the maximum speed, depending again upon the implementation, is around a hundred six kilabits per second up to four four killa bits per second. The killa bits per second, that's that's not a lot right in the grand scheme of things. If you had taught me back in the Apple two E days, I would have thought, wow, that was fat.

You can move everything I've ever written in just a couple of seconds. But these days, that's that's super slow. I mean, we're talking now about people getting fiber where they get a gigabit per second download. That's I don't even understand what that means right now. Right now, that just seems like a dream, although Google Fiber possibly coming

to Atlanta, uh and totally different podcasts. But anyway, Yes, so NFC really suited for this the small amount of data, small number of packets going between chips and uh there are lots of different implementations of that as well. Right. Okay, So so we mentioned that this is all sent via a radio frequency. What frequency is that? Thirteen point fifty six mega hurts Okay. Um. It was chosen specifically for its suitability for for inductive coupling, which we'll get into

in a second here. But it's basically the technology that makes all of this work. Um. And it's also pretty resistant to environmental interference and human tissue does not readily absorb it. Yeah, these are all very important things if you're talking about a technology that's going to be around people. Yeah, Like we're talking about stuff that could be either that credit card that we're going to talk about eventually, or even a smartphone where you have a virtual credit card

stored on another device. Plus, this idea of the resistance to environmental interference really important. If you're talking again about something that's going to be used frequently. You don't want, you know, if there's some sort of weird stormy weather outside and suddenly you can't process payments. If you're an umbrella store, that's bad news. That's very bad news. That's a terrible business model. Yes, you should have gone with

some other payment plan. Okay. So so technically this is an extension of r f I D technology, which is why you might have sometimes heard uh, n f C and r f I D being kind of equated colloquially. Yeah, it's it's similar in r f I D stands for radio frequency identification, So it's it's kind of like if you've ever had one of those um those security badges that you then hold up to a reader that when it detects the security badge, it will unlock the door

for you so you can continue in. Most of those badges are using r f I D rather than NFC technology, although technically they could use either. I mean, some of them probably do use n f C. It depends on it depends on how much money and what exactly you want to do with this kind of thing. But but both of these technologies when you really get down to it. Our applications of that inductive coupling stuff that we were

talking about just a minute ago um. And that's the property of flowing electrons and magnetic fields to influence each other um, meaning that when electrons flow through a conductive material,

they create a magnetic field. And conversely, and existing magnetic field can create a flow of electrons in a conductive material exactly as long as you've got a fluctuating magnetic field, because otherwise, if you or or in this case, you're talking about bringing something within the proximity of a magnetic

field that will cause electrons to flow. The important thing is if you want to make that last like you want to, and it's something that's going to be a magnetic field that continues to induce electricity, it has to be a fluctuating magnetic field, otherwise it'll just it will induce electricity originally at first, and then everything kind of balances out. So the same sort of thing with alternating current.

Actually alternating current is necessary to create that magnetic field because or at least a fluctuating one, because otherwise balances And yeah, you just get something that's equivalent to a bar magnet, which would be useful for a moment and then not useful anymore. Right, we know all of this thanks to Michael Faraday's work way back in the eighteen thirties.

So this is not new technology technically, no, But I should point out that Michael Faraday made all of his purchases in cash, so just made that up alright, So yeah, r F I D. Originally we're talking about a passive system, right, It's not something that's actively communicating between two entities. So in other words, you really had something that was kind of like a detector, and then if the right sort of chip came into the the field of the detector,

everything's cool. But you're not getting like an exchange of information, right, And what's going on there is that if you've got a chip in something um and by by passing that's something near a reader that generates a magnetic field, you're inducing the flow of electricity in the chip, thus creating a pneumatic magnetic field which the reader can then pick up. Right.

So this is pretty simple stuff. I mean, it's not like the chip inside whatever it is, whether it's a key fob or a card or whatever, it's not itself, uh connected to any sort of battery. It only gets that electricity when it comes into contact with that magnetic field of the reader. So, uh that you know that's passive. It means that there's not an active amount of electricity

going through that chip. However, there are also active versions of r F I D. Yeah, if you power that chip, it will allow you to to a to extend the chip to reader distance and also to store some information on the chip for the reader to find. Right, So in this case we're talking about something more advanced than just a key in a lock. Now we've got something where you could theoretically have information stored on that r

F I D chip. That is very important to allow you to do some form of transaction, whether it's monetary or otherwise. Right. NFC uses this same technology, but it allows for for data transfer both ways, and basically does this by letting the chip and the reader both have the capacity to act as the active or the passive partner in the transaction and they kind of switch roles or flip flop back and forth in order to complete any given transaction. And this is what really makes that

NFC ability. Like using it in the in the sense of a payment makes it really useful because not only can it allow you to pay for something, you can have this ongoing relationship between an app on either a credit card or in your phone or whatever whatever implementation, there can be this ongoing communication that allows you to do other things besides just make a payment, like apply bonuses that you may have accrued by being a frequent shopper at a particular place you know, or really carefully

encrypt a payment. Yes, and that will be really important for us to talk about when we get into the at least the perceived drawbacks of NFC. So we're talking about lots you know this. This is just kind of a platform, right, This is just a way of transmitting information. Again, it doesn't necessary early mean that it's just paying. It

can be practically anything. And in fact, one of the examples that I would hear all the time when I was first hearing about NFC being incorporated into cell phones, so that you would have an NFC chip in a cell phone that you could bring to cell phones together and exchange an electronic business card. So that way, if I'm at a conference and everyone happens to have these phones, we can meet with one another and do this quick exchange,

so I now have their contact information. I don't have to keep up with lots of physical paper cards that ultimately, you know, you're going to the washers or they're going to go into a dusk drawer or into the garbage. I mean, it's just you know, that's that's the thing. So that was one example, but there are a lot of other ones too, Like, for example, maybe maybe Lauren and I both have UH music players electronic music players that have these this NFC technology in it, I might

be able to do. You know, Lauren's listening to some music that I think sounds interesting, but I'm not familiar with it, and then just by tapping the phones, she can give me the information where I have access to that same sort of music. This would never actually happen because also the fact that Lauren and I listened to totally different types of music, and so I would never

ever think anything she listened to was interesting and vice versa. Clearly. Yeah, you know, I mean, come on, I like Tibetan throat screen singing. It's just it's that's my thing. I've never listened to Tibetan thrash metal, but that's that's interesting, okay, Um, all right, And so if you're thinking that all of this UH near field communications r F I D stuff sounds a lot like that Bluetooth low energy beacon stuff

that we were talking about in a recent episode. It's it's kind of similar, but it's different in a couple of ways. First of all, NFC and r F I d uh with with those things, the device that contains the chip has to be a lot closer to the reader than with Bluetooth low energy. Right, Bluetooth you've got like a maximum range of fifty meters, which, if you do the math, is significantly greater than ten centimeters. It's significantly You're indeed correct. And secondly, each chip and reader

can only interact with one thing at a time. That is, once a transaction is started with a chip, the reader will communicate only with that chip, and the chip only with that reader until the transaction is complete. So NFC isn't good for broadcasting to multiple multiple devices the way that Bluetooth blow energy is. But this actually, in my opinion, makes it more ideal for the kind of things like

payment process. It's more secure. Yeah, you know that you're not accidentally paying for someone else's purchase, or you know there's that things aren't getting yeah, if everything is set up correctly, right, right, like First of all, the range is so short that it's not likely that some let's say it's a store that has multiple cash registers, unless those cash registers are really close together and and those reading devices are you know, practically next to each other,

which can create problems of multiplying the field and getting everything kind of confused. Yeah, that that would be a problem, but you know, it's fairly easy to solve. For one thing, it's not likely that you're gonna have two devices within uh,

you know, having that ten centimeter overlap radius overlap. But for another, because it has this one on one communication and blocks everything else out, you don't have to necessarily worry about their being interference from other ways either, like someone taking out their their smartphone that has the same sort of technology to make their purchase in their next to you, but because of the arc of their hand

it comes into contact with that field. It really reduces those those, um, those worst case scenarios quite a bit.

So let's talk about actual NFC credit cards. Now, again, this is one of those things where in some countries this is ah, this has been looked into for a while, But let's let's talk about specifically the United States because one, we lived there, and too, there's this new initiative for the US to kind of move to this smart credit card technology and to explain to our our U S listeners what the big deal, while again all of our

friends over in Europe and Asia chuckle to themselves. Sure, because France was really the first country to adopt the technology for for payment related purposes. That was like what like to three years ago in Night four? Whoa, okay, alright, nineteen eighty four, the year after Return of the Jedi came out, and they furthermore, are you sure that wasn't two eighty three? They all came out three years apart. Sorry,

I didn't mean to question you. Um. Furthermore, France had widespread chip based credit and debit systems by nineteen two, So so we're we're technically really only fourteen or known. That's twenty four years behind, not thirty something years. But well that's that's something right. So again, it's it's it's not that the United States hasn't tried this kind of stuff out, or that we don't have companies that are

working on building this technology into their credit cards. It's just that we don't necessarily see it spread out widely across our entire infrastructure. Right. Uh sure. Side note, I'm not sure if I actually said numbers correctly. I really can't subtract on the fly, so if if you need to write it and correct me on that one. But but okay, So anyway, the US has indeed seen applications

of this technology before. It's not completely new, like Jonathan was just saying, circa seven mobile, the the Gasoline Petroleum Company, debuted a station credit card system that used an r F I D key chain to access the user's account, and then in two thousand five, JP Morgan Chase introduced a card a credit card UH with a proprietary r F I D system called blink right, and then Visa and master Card have both been looking into it as well.

Moving into the two thousand's, we've seen that technology come up, but again, not so useful if if you were kind of a homebody. Right. Well, the problem is that this technology is terrific, but it only works if stores are set up with the infrastructure to allow you to use it.

So although they were pretty great for Americans who traveled to other countries, there weren't that many places that you could use them in the US, and in fact, I know that there are tourists who come to the United States who are used to this system and back in Europe or back in Asia who then I wonder why you have to take their credit card in order to make a payment at say a restaurant or you know, they the whole swiping thing is one of those things

that oh, how how how quaint and insecure. But we'll get into that too, but yeah, it was. It's one of those things where I know there are people who come over to the United States are kind of I mean, the US has this this at least this reputation of being really technologically advanced and forward thinking and all of those kind of things, but when you get to certain industries, we really lag behind. In fact, we lag behind in

a lot of ways. But but you know, within within the United States, we don't we don't tend to think that way because we're kind of insulated and we aren't living in this own little tech tech bubble where we think we've got all the best stuff. Guys, we don't have the best stuff. We do not we had the best stuff in a long time. Merchants and credit card companies both have cited the cost of the infrastructure, and also the public's lack of understanding of the technology as

barriers to making all of this widespread. Yeah, ignorance and expense the two big barriers, and in fact that ignorance problem. I mean, it sounds like it's something simple that you just do a couple of little p s A s and people understand how the technology works, but never underestimate how we will allow ignorance to play into our major policy decisions. If you want an example of that, just take a look at how well the metric system was

implemented in the United States. It's it's understandable, and maybe not about the metric systems, but it's it's understandable about about business decisions that are going to potentially cost you a lot of money. Like I can see why why companies would be a little bit shy about enacting some thing that they don't think is going to make them money.

And in fact, now we'll get into why one of the big reasons why why merchants in particular might be reluctant, and part of that is that although NFC itself is a standard right, that's a standard form of radio transmission. So the basic technology upon which information is flowing is going to remain the same from one implementing one implementation

to another. The actual uh software that's being used to transmit that data depends upon who it is that's creating the program or the proprietary right and there they have not classically made these systems to to work across each other. Right.

So if you have one credit card company that's using one of these implementations of software and a different credit card company that uses a completely different implementation, and those two programs cannot communicate with each other, then as a vendor, you may have to choose either between two different credit card companies or you have to spend twice as much to get as many to be able to support both

of them. So, because there's no standard, okay, but so there are a few different proprietary ways of using this in the States right now. Exactly. Yeah. One of the big ones are at least one of the ones that probably has the most high profile of all of them. I mean, it's not the oldest implementation, but it's one that a lot of people have heard about is Google.

Google has really been behind NFC technology for a while now, a couple of years and they also have their app called Google Wallet, which is meant for both payment well not just both. It's meant for payment transfers, so that if you're buying something from a merchant that supports Google Wallet. It's also meant to be able to give you access to special deals, like if someone's got a sale. It can give you a notification. If it's some vendor that you've gone to several times, it might let you know

about any specials that are running. Uh. It can also incorporate things like customer loyalty programs. So let's say that I use it for my local coffee shop and the tenth cup of coffee I get a freak cup. I don't have to keep track of a card that has to be punched. It's all. It's all. Yeah, it's tracked on the app itself. UM So that's a that's a big one that's got a lot of press recently. And you know, I have a smartphone that has an NFC chip,

I have a Google Wallet account. I have never used that to make I've never seen a vendor nearby that used it. I know there are some because if I go on their website and I do a search, a few of them are in this area, this area being Buckhead in Atlanta, that's where our office is, and I know there are a few that accept it. I have never gone to any of them to try it out, So I mean it's not that I'm afraid of technology. I just don't have access to it. Yeah, I haven't either.

So then we've got MasterCard. They have a a app called UH, or at least a technology called pay Pass, which is a tap to pay method where you use a physical card that has a passive n FC chip in it. So it's kind of similar to those passive r F I D chips we talked about earlier. It

doesn't require a power supply, right, which is important. I mean, you've got a physical credit card, you don't have a lot of space to put a battery there, so UH you end up using the inductive coupling to get this payment terminal to process the information UM and you can also have an electronic version of it that's stored as an app on a smartphone that has enough C chip and that one is compatible with Google Wallet, which, as

we said before, is maybe not actually useful. Yeah, yeah, I mean it all depends on you, Like if you live in San Francisco. There's probably every single place around you that's that supports it, but here in Atlanta, you know. So. Um. Another one is one that's done by American Express, a T and T, T Mobile and Verizon. Uh. This one,

for all you archer fans is uh isis UH. That's actually the name of it, isis I s I S. It promotes itself as the industry's most widely accepted mobile wallet, So it's very similar to Google Wallet, has those same kind of features, but it's a different proprietary approach. So again ISIS and Google Wallet. If it's like a Google Wallet using that MasterCard pay pass, they don't necessarily work

on the same system. So if you have a receiver as a vendor, you may only be able to accept one but not the other, which we'll talk a little bit more about in our our problems with n f C section. And then of these companies that we've talked about, it seems like Samsung and Visa have been left out

in the cold. Yeah, you got Samsung Wallet, which is a partnership between Samsung and Visa, But this one was kind of a a head scratcher because they announced this partnership in two thousand thirteen at the Mobile the World Mobile Congress, which the two fourteen one is happening as we're recording this podcast. But the two thirteen one they announced this partnership. They said, Oh, here's what we're gonna do.

It's gonna be this big thing. It's going to be our approach to this NFC payment processing and all the sort of wallet features you would expect. And then they started announcing the upcoming Samsung phones which did not support Samsung Wallet. So you had this partnership in this technology, but you didn't have the actual implementation available for anyone to purchase in the in the flagship products that were

coming out. I'm sure it was a it was a just missed dovetail kind of situation wherein they couldn't quite make it go. Yeah. I mean, it might have even been one of those things where you try and factor in the price of including another chip in your phone because that's going to make it more. Sung is always very priced Savage, Oh yeah, yeah, Well, for one thing, they're the company that makes a product for every price

point and every use case. I mean, I watched a video recently that showed a lineup of all the different Samsung products, and at one point they they joked that the video editor had died trying to put it together because it was just too many. That was a scene Net video by the way, Tales of Adventure or something along those lines. Great series. You should check it out.

But we've got a lot more to talk about with this technology, including those pros and cons, and before we get to that, I think we should take a quick break to thank our sponsor. Alright, so we've kind of hit tod that some of the challenges of this whole NFC approach, particularly here in the United States. Obviously it's already implemented in other parts of the world, so why aren't we seeing it everywhere? One of the big reasons, Lauren you brought it up it is the fact that

to build up infrastructure means investing. It's it costs money, and especially when you've still got all of these competing technologies working, it's it's it doesn't make any sense for anyone to build that infrastructure, right if there were one of these that came out as the dominant one, and therefore it kind of just gravitates to that becoming a standard that would be a lot easier on the merchant's end of things, because you would just invest in whatever

technology one out. But in these early days, it's really hard to say which one is going to be the most important, and in fact, it may change from vendor

to vendor. You might do some market research of your own, just look at past transactions that you have that you've managed over the time that you've been a merchant, and you might see perhaps your business, for some reason or another, you just process more payments through American Express, which means you would want to go with that isis approach, right, So it makes more sense to you just because the vast majority of the people who come into your store

are using American Express cards. But if they're all using Visa cards, or they're all using MasterCard, or there's a real strong mix in there, your decisions start getting really murky and complicated, and you may end up investing in an infrastructure that ultimately fails to take off because some

other technology becomes dominant. Well, then you've got a real problem on your hands, right, You've spent all this money with no payoff, absolutely, and and that's that's even assuming that people are using these NFC cards a lot of people still have meganetic stripes, and so therefore it's it's a dual problem. You know, if if you can't get customers onto these new cards, then they can't use your system and no one it's just yeah, it's it's kind

of us catch twenty two's right. So you know, you you want there to be an existing base of customers out there who have this technology so that your investment makes sense. But the customers don't really want this technology unless there's ways to use it. So yeah, it's this this weird problem where you have to have the solution to have the problem in order to solve the other half,

and it's ways. Yeah, And one of those barriers to getting customers to sign up for these for these NFC cards is the security question, right, because if you're talking about transmitting information by radio already you have people wondering about the possibility of eavesdroppers, someone carrying some sort of device that can read off the information on a chip.

A couple of different things to keep in mind here. One, if you're talking about an active NFC chip, something that's actually drawing power from something like a smartphone, it's really only gonna be broadcasting when you tell it to broadcast, so when you're using the app to actually make a purchase, unless, of course, your smartphone itself has been hacked in some way, in which case you've got multiple problems, not just NFC absolutely, uh.

But you know, since it is a radio communication, once that once that transmission is active, it can technically be picked up from up to like ten meters that's about thirty three ft away, right, Yeah, so there is that concern. However, one way to get around this concern is to use

our beloved friend encryption and encryption. I mean, this is it's obviously going to be important for any company that wants to utilize NFC transmissions because if you don't show that you value the safety the financial safety of your customers,

you're not going to have customers for very long. So this is actually pretty sophisticated stuff, and there's encryption along multiple steps, so it's not like it's just a simple it's not like a transposition cipher where A is B and B A C and C s D. They'll never figure that out, right, right, When when an NFC card and a card reader come into contact with each other, and there's encryption levels involved. There's there's this whole series of sign countersign kind of exchanges that are going to

verify that that each bit is dealing with a verified bit. Right, So if you were to eavesdrop on that, all you would get is the pop product of this conversation, which would just be gobbledegook from your perspective. You wouldn't have the description key exactly, and nobody has the key in this situation. I mean, it's it's a it's a temporary, one time use kind of thing. And again, this technology is primed to only talk to one device at a

single time, so that cuts that down quite significantly. Also, when you look at it, you know, even though you think, well, this sounds like there's some security issues, it's actually safer than our old magnetic stripe technology. Right, So even if you feel like this has got its own kind of drawbacks, it has fewer drawbacks than the stuff we're depending on right now. Oh. Absolutely, the data on a on a magnetic stripe can be read, written, deleted, or changed with

pretty common equipment. Yea. This is a reason why, uh, when I stay at a hotel that uses a magnetic stripe key, I tend to keep the key because you never know what's actually been encoded on that key. There could be I mean some places use the key as also a form of payment, where you can buy stuff at a restaurant that's in the hotel, or or a shop in the hotel. It's a general identification tool. Share. Yeah, so I'll keep those keys and then shread them at home.

I really do. That's smarter than I am. So and I'm not known as a privacy nut. I mean, I'm an advocate, but I don't. I don't get like super paranoid unless I happen to be around someone like Darren Kitchen, because the dude is a brilliant hacker, nice guy. I just I just feel like everything I ever said on the Internet is in his hand anytime I happened to be near him. But other than that, I'm pretty easy going. But this is one of those steps I actually do take.

That's that's not paranoia. That's intelligent different. It's not paranoid if they're really out to get you. Uh. And so, Also, like we said, these transactions, in every implementation I I've seen where you're using it to make a payment, it requires that you enter a pin as well. A personal identification,

right instead of a signature. Right. So when I would make a payment at that coffee shop, in order for that payment to go through, I would first have to input whatever the PIN is, you know, however long that might be. It's usually a four digit number, that's what we're used to in the United States. Then that would

allow the transaction to continue. So in other words, if you lost your smartphone and someone picked it up, you wouldn't have to worry about them automatically being able to use that smartphone to go on a spending spree, right right. I honestly, magnetic stripes kind of terrify me. They. I recently, when I was out to dinner with a friend, we we accidentally exchanged credit cards. When we got the bill back, and I used his card for two days before I

noticed that it was his card with no problems. Yeah, the security measures in the United States are a little on the lax side, depending upon where you go. Some places are really good about it, like, for inst instance, I have on my card ask for I D written on the back rather than my signature, which is a terrific way of cutting down at least on that kind of kind of problem. So whenever anyone apologizes but asks for my idea, I tell them, do not apologize. That's

what I want. I want that extra level. The problem is it just doesn't happen as frequently is should but at any rate. So now that kind of brings us Chase one of us to talk about coin. So we we covered the NFC thing. Coin is not and NFC enabled credit card. It's actually a different implementation of electronic credit cards, and it's a really nifty idea and the implementation is something that I've never seen before, and I find it kind of exciting and I like the I

like the notion of it. But it also has some drawbacks that we're going to talk about. Sure, But but it is but it is really cool. I got so excited when I saw it. So it's it's the same size and shape as a standard credit card, and it's a it's it's a crowd funded effort. This is this was a startup that got some of its funding at least by asking people to make contributions to their company. So what exactly is it? Well, it's build as a device that can replace every type of credit card, loyalty card,

gift card, and membership card all in one go. So in other words, instead of having to carry ten or fifteen different types of cards, depending upon the kind of person you are, you would only have to have one. And it works like this because it's it's actually a computer in a card. Um that magnetic stripe on it is readwriteable, right, So not it's not. You know, a typical magnetic stripe on a credit card is read only you.

You aren't. Hypothetically, you're not supposed to overwrite it. Uh, there's nothing that's given to you in the credit card that allows you to overwrite it. There are technologies that where you could overwrite the information on your magnetic strip, but it's meant to be read, right, Yeah, don't do that. By the way, it's almost certainly illegal where you are. But then you rate. This is designed so that it can on the fly change that magnetic strip to mimic

whatever card you would be using. So, for one thing, whatever card you're using would need to have a magnetic stripe as part of its way of being read by whatever vendor. So if you have a loyalty card that's punched card, that's not necessarily gonna you don't want to punch a hole in your coin smart card, that would be. But if it has some sort of counterpart where there's a magnetic strip or that they just implement that into their their vendor system, then you could use it as

a loyalty card or whatever. U. So yeah, this this little computer on the fly can change the programming on that magnetic stripe to be whichever card you need. So the big advantage from the merchant's side of this is that they don't have to install one of those crazy readers that NFC or r F I D would need, right, They could just use their their established credit card reading

equipment to do this. Because that magnetic strikes the same thing on the coin card as it would be if you were using the actual credit card that it's mimicking. So when you you swipe it, it's just going to read as if it were your Visa or MasterCard or whatever. Right, And the advantage to you is that you can you can enter all of your systems of payment and loyalty

that use these magnetic stripes into into the app. Yeah. Yeah, So the way this would work is you pair the coin smart card with something like a smart phone that that's running this coin app on it and you also get a little a little um uh peripheral that plugs into your phone. It's kind of like one of those square card readers that you've seen that that merchants often will use, where it's hooked up to an iPhone. You

just swipe a card through the square things. Yeah, because it turns anyone, it's like anyone into a mobile payment processing system and you can have I mean for people who run things like they go to a convinced and they have a booth set up at a convention for them to sell merchandise to people. This is great because it has such a low barrier of entry. The cost is really low. Yeah, it's it's essentially free, and then you pay a certain percentage of each of each swipe

of transaction. So so it's great anyway. But this technology works very much the same way. It's got a little swipe reader that you connect to your phone, and as you swipe a card, it stores all that information that's in that magnetic stripe onto the app and then relays that to the coin smart card, so that the coin smart card is able to mimic that particular credit card

or loyalty card or whatever it is. Uh. You're also supposed to take a picture of that card, so that way you will be able to cycle through the cards properly when you're using it and remember which is which. Yeah, because if you know, if you have been to have a check card and a credit card, and it's really important for you to use the right one. Yeah, I've known some people who remember as entire credit card numbers

of their own. But I know, yeah, I know folks who make enough purchases online where they've committed all of the cards they have to memory. I don't do that frequently. I have a hard time with like my phone number and my social Security number. I had a hard time with the three digit security code that's on the back of your card, which every single card I've owned, that number has worn off within like three weeks of getting

the card. So I have to commit this three digit number to memory, which shouldn't be a problem, but I got a lot of brain cells that are dedicated to firefly trivia, so apparently a three digit number is a herculean task for me to remember at any rate. So you swipe all your cards, you differentiate them. Your coin smart card can then represent any of those cards, so you can then put those those physical cards simply safe. Um, keeping in mind that there are some some instances where

you might run into some trouble. I'll get into that when we get into some of the cons sure, but so okay, So so coin interacts with your cell phone through Bluetooth low energy. It's so good that we already did that podcast, so we don't have to go into what this is. But it does mean that the smart card and your app can communicate up to a fifty meters away from each other or or thereabouts. That's like

the ideal maximum range. Uh So this actually allows you to have some cool features built into that smart card a right. One of its security features is that if your your coin card gets out of range, out of that fifty ish meter Bluetooth loow energy range of your phone, your phone will send you a little alert saying like, hey, you might have left your card somewhere. Yeah, which I

have done a few times at restaurants. So this would actually be that little bit of security where if someone took your wallet but you still had your phone, then you would get an alert. So you knew that you would know, maybe faster than normal, that you've been pickpocketed or if you're just happen to be careless occasionally, you know, once in a blue moon, then it would all to you. If you had left your card behind, you can immediately go back and reclaim your card, which was pretty cool.

It's designed to be really energy efficient. That bluetooth low energy stuff is pretty cool. So the battery in the card should last a good couple of years, and then after it's out, you just replace it the way that you would replace any other magnetic stripe card exactly. And that's another thing is that you know that magnetic stripe stuff, that that material can wear down after lots, especially if you happen to be a frequent shopper. Um So in that sense, you would need to replace the card anyway

because it would actually physically wear down. But the battery itself, you don't recharge it, right, there's no you don't plug your smart card in at the end of the day. It will actually hold that charge for two years. Okay, But so this is all really cool, but it sounds to me like it's not going to solve this problem of magnetic stripe card information being pretty insecure compared with NFC. Yeah, yeah, exactly, if you happen to have a device that can read

a magnetic stripe. Well, worst case scenario, let's say that some on some um person working at a a any kind of merchant, who has decided they're going to set out on a life of crime, and they have invested in a magnetic card reader where they can swipe and store information. Let's say that they've got ahold of that, and they get ahold of your card. Maybe you've handed it over for a purchase and you think you're just making a regular purchase. Meanwhile they are cycling through every

single card you have and reading it. Not only would they have access to whatever card you were using at the time, they might theoretically be able to access everything. Now they're they're ways of getting around this with the app, so that if you cycle from one card to the next, you have to agree to it. So in that case, the worst case scenario is they just get access to whatever card you're using at the time for that transaction, as opposed to every card you own. So better, Yeah,

it's better. It's better. It's way better than suddenly saying, oh, my Visa card was lifted and my Master card, my American Express card and I no longer have nine cups of coffee at my favorite local coffee right. Apparently I made a purchase of fifty seven cups of coffee today, don't have any memory of that, possibly because of the caffeine affecting my brain, or more likely I have been hacked.

So yeah, there's that issue. Also, um, you know, they could store a lot more information on them than a credit card would typically have on it. So in theory, if someone were able to get access to maybe the worst case, they get access to both your phone or whatever device you happen to have paired with your card and the card itself, they get to get access to lots of personal data, so that would be an issue too. Also, I do want to put in that magnetic stripe cards

and and computerized magnetic magnetic stripe cards. I'm going to figure out how to say that by the end of this podcast. I swear like coin are not the only things that you can put a whole bunch of different information on. NFC chips are capable of holding multiple kinds of all kinds of info. Yeah, yeah, yeah, exactly. It doesn't have to just be uh financial oriented or even how many times you've bought that cup of coffee. Yeah, in Europe they're they're used as patient I D cards

that store a certain amount of medical information on them. Right. Yeah, So I mean the convenience feature I totally understand, right, Especially if you are someone who has lots of different cards, the coin approach makes a lot of sense from that respect. Personally, I don't actually carry a lot of different credit cards, so for this, I would think it was a really cool technology, but it wouldn't be terribly useful for me.

The cards that I do carry I want to keep very very separate and not have any chance that would excellently use one that rather than the other. Um. But I could see how this could be really important for someone who has multiple cards that they're constantly magic, particularly if you're one of those people who have that that you know, guys, you know what I'm talking about where you can't sit upright because your wallet is so thick that you're always kilted at an angle. Um. You know,

I feel you. I used to be you, but I I've managed to I did. I got rid of a lot of loyalty guards. I said, you know what, my loyalty. You can't put a price on it. I'm a free agent. I go where I want to. But yeah, so that's you know, things to keep in mind. You are you're you are a coffee rebel, Jonathan, I am. Yeah. Look, just because I went into Starbucks, you know, twelve times last week, doesn't mean I'm going to go to that one today, despite the fact that's the most convenient because

it's right across the street. Anyway. Yeah, it's interesting technology. I love the idea that it's a read write magnetic strip. That to me is just cool that it's oh yeah, you know, it's kind of like it it makes me think of something that you would see in a science fiction movie, like you know, Blade Runner being one of the favorites around here in the office. But it's right

here right now. So yeah, so thank you Chase for for asking us about that, because although although it is it is a technically kind of separate conversation from the NFC technology one, it's still related and I'm excited about

both of these technologies upcoming. Yeah. Yeah, yeah, especially uh, you know, we're seeing, like, like we said, deadlines here October two thousand fifteen for these smart cards coming up from the major credit card companies and hopefully that will also mean that we'll have an agreed upon standard at that point. And also the coin Um smart card I think they're launching sometime in the summer of two thousand fourteen is when they should start seeing the actual products

start getting into Backer's hands. I'm I'm wondering how this NFC decision is going to start affecting coin and whether or not Coin is running a little bit scared right now. Yeah, it could be that's one of those great ideas that launched too late. Uh you know, I'm sure we're going to see support from magnetic stripe sticking around for a

little while. Anyway, I mean, merchants are going to probably have multiple things that will have to rely upon, so if you if I can't imagine anyone just throwing the system out the window, and unless they decided to do it like office space style, which is fair. That also was did bring up one other issue I thought of with the possibility of using coin as a payment. I totally it's slipped my mind, but now it's come back

to me. If our is lost to the facility you're in, so some places still have those old carbon copy uh devices where you put your card down, it makes a

hard carbon copy of whatever is. And this is also something you'll see if you go to like conventions or things like that where people aren't able to afford the electronic versions um or perhaps there's a a malfunction of some sort, or if you're in the basement of a large hotel, for example, and you cannot use a card swiper that's to be transmitting via three G. Yeah, yeah, you can't get a signal, the WiFi is completely worked. Yeah,

you've gotta You've gotta figure something else out. Well, a coin card won't help you in that sense because it's not going to have the physical numbers on the card

for them to copy using this old method. So if there ever is a situation where you have to make a purchase through a merchant who doesn't have access to WiFi or three G or anything like that, or a telephone line, then I mean, granted, that's you know, one one case out of you know, a hundred that you would be encountering on a normal basis, but still something to think about. It's something where the coin method would

not work. Every time it rains. My favorite tie restaurant is off limits because I don't have cash on me. Oh wow. That's well, whenever I go shopping at at any sort of convention or conference, like if I'm looking at gift shops or you know, Dragon Con here in in in Atlanta has an enormous actually sometimes more than one enormous dealer room that has all these different vendors with cool stuff in it, but a lot of them.

You know, the one booth might be really technologically savvy and ready to deal with anything, and the next booth might be, you know, you need to you need to barter with chickens. It's just it's they run the whole gamut, really they do. And I'm personally sick to death of carrying chickens with me to Dragon Con. I'm not happy about either. It's just it's not convenient. So anyway, thank you so much Chase for asking about coin. It was

fun to get into that. And I hope that this kind of gives some of our our u S listeners and a better idea of what enough See is all about and what they can expect to see over the next couple of years. And uh, for those of you in other places where you've been using NFC for a while, maybe you learned exactly what's going on behind the scenes

of that technology you depend upon frequently. I hope that this was helpful for you guys too, And if you have any suggestions for future topics that we can tackle here at tech Stuff, here's what I want you to do. I want you to send us an email. That address is tech stuff at Discovery dot com. Or if you want to just be really succinct you think an email is just that's too formal, let's know on social media you can find us at Twitter, at Facebook, and at tumbler.

We use the handle tech Stuff hs W at all three locations, and we will talk to you again really soon for more on this and thousands of other topics. Does it staff works dot com.