The End of the Credit Card?
A new app called Card Case foretells a world without cash and plastic.
Paying for stuff with your phone sounds awesome until you stop to think about it. It seems like every major tech company, including Google, is touting the fact that we’ll soon be able to buy anything and everything by waving our phones against a pay pad. Wait a second: Why is this supposed to be any better than pulling out a credit card? It’s not faster, it’s not more convenient, and it’s not any safer. Plus, many phones—and most stores’ pay pads—don’t yet have the necessary “near-field communication” chips required for these sorts of transactions, so the whole idea is kind of a fantasy anyway.
I pointed out this flaw several months ago, and I still haven’t heard any good argument for why we should be paying for stuff with our phones. Sure, I’d like to ditch my wallet, and I’d love if old-school shops and services (like buses and parking meters) stopped requiring cash. But if we’re going to adopt some new way of paying, shouldn’t we choose something with obvious advantages over how we do things now?
Well, I’ve found something with those obvious advantages. It’s an app called Card Case, and it’s made by Square, the brilliant payments company founded by Twitter inventor Jack Dorsey. Because Card Case runs on your phone, it may sound at first like the same clunky, phone-and-pay-pad systems being peddled by other firms. But Card Case doesn’t let you pay with your phone; it lets you pay with your name. With this app, you go into a store, choose what you want to buy, and then tell the cashier your name. That’s it—you’ve just paid. You don’t have to pull out your phone, you don’t have to open the app, you don’t have to sign, swipe, or wait for change. As long as your phone is on your person while you’re in the store—in your pocket or your purse—Card Case can authorize your payment without you having to do a thing.
The version of Card Case that allows for such automatic payments is being launched today. (And for now, it’s exclusively for the iPhone.) But Square installed a pre-release version on my phone earlier this week. I used it at a couple of small stores in San Francisco. In one case, I walked into Pinkie’s Bakery and asked for a cupcake. The cashier told me my total, and I said, “Put it on Farhad’s tab.” She saw my name and photo on her iPad, tapped it, and I was done. A receipt was sent to my phone. The experience was magical—almost creepily so. It happened so quickly, and lacked so many of the hassles of a normal transaction, that when I left the store with the cupcake it was hard not to feel like I’d just pulled off a heist.
Square was founded last year, and in its earliest incarnation it provided a way for businesses to accept payments. Square makes a small credit-card reader that attaches to Android and iOS devices. It was thus a perfect payment system for traditionally cash-only businesses like food trucks, farmer’s market vendors, and high-school football ticket sellers. Square’s other advantage, for merchants, was price and ease of use. To accept payments, businesses don’t have to sign a contract or pay any kind of setup fee. Square takes 2.75 percent of every transaction—which, for most businesses, is cheaper than setting up a traditional merchant account. Since its launch, Square has shipped more than 800,000 readers.
Farhad Manjoo is Slate's technology columnist and the author of True Enough: Learning To Live in a Post-Fact Society. You can email him at email@example.com and follow him on Twitter.