In our zeal to disrupt the physical wallet, we seem to be in a hurry to skip to the part where cash and credit cards are forgotten instantly, relics of a bygone era.
Payment-tech startup Wallaby is taking a more pragmatic approach through its “One Card to Rule them All” service, launching into public beta today. Rather than eliminating all the credit cards in our wallets, the company looks to combine and optimize their use.
A single Visa-branded Wallaby card will link to all existing cards and dynamically rout transactions based on preferences for things like rewards, miles, interest rate optimization, and savings. Wallaby does not extend its own lines of credit or even checking or debit accounts. The company simply offers a cloud-based digital wallet tied to a single smart payment card.
Users set card behavior through the accompanying Wallaby Web dashboard, and soon its mobile app. For example, one credit card account might be set to receive all transactions for gasoline and transportation. Another may be tagged for transactions over a given dollar amount. A third card might receive an overriding priority that stipulates all transactions taking place during business hours be directed to its account.
Most importantly, all three can be left at home.
The options are many, although the end solution dosen’t need to be overly complex. The key takeaway is that it adheres to each user’s personal preferences and objectives, while being frictionless and simple. Finally, in unique situations, the mobile app will allow users to manually and temporarily override all pre-existing rules ahead of a single transaction.
The company has kept the process of applying as simple as possible. At this early stage, applicants simply submit their name, email address, and the number of active credit cards they have. The beta memberships will be rolled out slowly, and once a user is invited to join, a more complete and traditional financial services application will be required.
In addition to its recently completed private beta, the company has been surveying consumers to learn more about their challenges and preferences with regard to managing credit cards. The general takeaways confirmed their hypothesis that the current methods of managing multiple credit cards is a pain in the ass and that “cash (back) is king.”
I first caught up with the Wallaby guys during their demo day in April, as they graduated from the Los Angeles incubator MuckerLab. At the time, I wrote:
“The solution is great and one that I’d love to use myself, but it hinges on users’ motivation and ability to manage their preferences. I liken the problem to setting up email filters. If done properly, the world becomes an organized and efficient place. More often than not, it’s too much trouble and falls by the wayside.
“Another challenge is addressing the inevitable ambiguity between personal and business purchases. The company has a couple smart ideas about how this will work, but it’s sure to be a key issue to solve. That said, these guys are addressing an enormous market that is desperately seeking solutions. Also, if they manage to reach scale, the data they collect on purchase habits will be seriously valuable, should they elect to monetize it.”
Since this time, the company has worked with early customers to refine the rule setting process, making it as intuitive and efficient as possible. The challenge of seamlessly blending business and personal cards is a bit more up in the air. Wallaby founder and CEO Matthew Goldman has some interesting ideas about how to address this issue, but at this stage will leave his users to rely on manual overrides when transactions fall outside existing rules.
Now two months out of its incubator, Wallaby is currently putting the finishing touches on its seed financing round with a few angel investors said to have already written checks.
While the company has yet to announce a fee structure for its service, the first 1,000 users to signup will get free lifetime membership to Wallaby, regardless of its future pricing decisions. Users number 1,000 through 5,000 will get the first year free.
There are several particularly interesting areas of opportunity for monetization as the business scales, including those surrounding the purchase habit data collected. Acknowledging the privacy issues that are ubiquitous in this space, Wallaby could likely begin to extract and then sell actionable insights about consumer behavior, which many consider the holy grail for targeted marketing — the company has not yet expressed any plans to pursue this opportunity.
Other mobile financial apps like Mint and Lemon have relied on notifications and budgets alerts to assist users in managing their spending. None to date has allowed users to manage the various rewards and benefits of their multiple credit cards.
In a perfect world, we’ll be able to leave our cards — credit, membership, and identification — behind while carrying only a single multi-purpose device, presumably our smartphones, capable of handling all of our daily needs. The fact is that as much as we want it to be a reality, this day remains a far off fantasy.
Changing worldwide payment infrastructure and user behavior isn’t an overnight task. In the interim, the ability to streamline our card-carrying needs to a single card, without sacrificing the flexibility of having multiple credit accounts, seems like a wise solution.