
The Wallaby Card - theuri
https://walla.by/the-wallaby-card
======
runn1ng
I am an European, so maybe it's different in US, but is too many cards problem
that people actually have? Judging by the top 2 stories on HN right now, it
probably is.

I have a card. It is hooked up to my bank account. It works.

~~~
abalone
The reason is U.S. banks have been getting creative with reward programs
lately. They entice you with "5% back on gas" or "100,000 points" which all
seems very grand. So naturally us nerds want to hack the system for maximum
profit.

The reality though is that these programs are not sustainable if fully
exploited. Interchange (the fee U.S. merchants pay when you run a card) is
under 2%.* A bank can't reward you more than that without losing money. Well,
they can make up for it on the interest they charge on debt, but presumably if
you're optimizing cards then you're optimizing where you hold your debt too.
The way banks make these programs viable is with marketing, tricks, rules,
time limits, etc. that make you _think_ you're doing better than you really
are.

Smart consumers figure it out. But not everyone bothers to, and so there's
enough "dumb" ones to make it possible. Kind of like how gym memberships work.

Long story short: If a service like Wallaby takes off and levels the playing
field, then _these programs will disappear._ So if you're one of those "smart"
consumers that enjoys exploiting cards to make an extra buck or two, then
you're better off not rocking the boat.

*Europe's interchange is a fraction of that, which is why you don't see this rewards phenomenon there.

~~~
the_watcher
I have a decent number of credit cards, but most of them are cards that I
opened and just used to hit the minimum spend, claim my signup bonus, and then
go back to using my regular credit card that has the best day to day rewards
(I also only open cards that waive my annual fee, and cancel any that try to
make me pay to keep it open. Keeping them open for free is good for my credit
utilization and age). Sometimes, however, a specific card will offer 5x (or
something similar) on certain categories for a limited time. If I could give
Wallaby detailed information about how I value rewards, it would be nice to
just have one card that I carry around.

I pay all my credit cards off monthly, and basically treat them as cash (so
I'm not the target consumer of a rewards card, I know).

~~~
abalone
You are one of the smart ones. You're currently subsidized by the "dumb" ones.
If everyone becomes smart, the maximum possible reward will decrease.

~~~
TrainedMonkey
Majority* of people I know that use credits cards and pay minimum required
amount are not dumb people. If anything they do not have a choice. Living from
payday to payday will do that to you. Unexpected event? Time to pull out that
credit card. It sounds so easy to just bunker down and break the cycle, but
then whammy unexpected event.

* I might be biased in terms of people I know.

~~~
genwin
The people in my life who live payday to payday overspend, but don't see it
that way. They _need_ an iPhone!

------
abalone
Pretty interesting. Here's my guess at how this works:

Wallaby is both a card issuer and (working with) a processor. The merchant's
processor routes the charge to them like a normal card. Then Wallaby selects
the appropriate card number and proxys the charge via their own processor to
that card's issuer. I.e. the same round-trip transaction, they're just a man-
in-the-middle swapping out card numbers. The issuers never see a difference.

Couple issues they'd have to have worked out for this:

1\. Getting approval from the card network to proxy a transaction like this.
Given the founder's background with Green Dot I can see them having the pull
to drive that.

2\. Dealing with chargebacks. The merchant will have a record of the Wallaby
card number because that's what's swiped through the POS. But the customer
will see it on their actual card's bill (let's say Chase). If they file a
dispute, and Chase contacts the merchant, there's a card number mismatch. I
wonder what their solution is for this. Perhaps they instruct cardmembers to
initiate disputes with them and they proxy those as well.

Overall I have to say I like this a little better than Coin, if only because
it's simpler. You don't have to make any decisions each time you pay, you just
configure it through the cloud, which can actually make smarter decisions for
you. And it's not $100.

~~~
disc
This looks like it work great for optimizing/consolidating personal cards, but
one advantage Coin offers is the flexibility of charging normal purchases to a
business account. I'm not sure how Wallaby could discriminate if my restaurant
meal or office supplies are a business expense or just personal use.

Either way I'm all for any innovation that thins out the number of cards in my
wallet (with the goal being zero.)

~~~
thatthatis
1) get two wallaby cards, one for business one for personal.

2) put your wallaby card into your coin.

3) carry wallaby and one business card

Today just got too meta. Now my brain hurts.

~~~
bloometal
Wait. Why not both wallaby cards in the coin?

------
dangrossman
I'm stumped as to how this can work. The logic can't be embedded in the card,
as the card doesn't know what you're charging to it -- the merchant's category
code (i.e. gas station, restaurant) isn't programmed into their terminals,
that data gets relayed through the various backend networks between banks.

So this can't be sending a card swiper the number of one of your cards, which
means it must be a valid credit card itself. It has to be issued by some
Visa/MasterCard/Amex/Discover member-bank to be widely accepted, though none
of those logos appear on the website's mockup.

If that's the case, I still haven't a clue how they turn a capture against
their card into a capture against one of your "real" cards based on the type
of store you used it at. They can't be charging your real cards themselves, as
all the charges would come from a single category code, whatever one was
assigned to their own merchant account, so you won't get the right rewards.
They'd also lose money on every transaction that way, as they'd have to pay
card-not-present fees to charge your cards themselves, while only collecting
lower card-present fees when you use the Wallaby card.

Puzzling. They must be trying to get some kind of relationship somewhere else
in the network that no other company has (either direct relationships with
issuers, or permission from Visa/MC to sit on the processing network somewhere
and do some kind of MITM).

~~~
eksith
I think how it works is that the charge initially goes to Wallaby so the
merchant is paid. They then charge the amount taken from Wallaby from one of
the listed cards according to where the charge originated from and which deals
your listed cards have.

It's a network switch for cards, basically.

~~~
dangrossman
If you use your Wallaby card at a gas station, then Wallaby separately charges
your card that offers cash back on gas, you won't get any cash back as
Wallaby's MCC is not that of a gas station. They'd also have to pay
transaction fees every time they charged one of your cards, and those fees
would necessarily be higher than any fees they could collect through usage of
the Wallaby card. That can't be what they're doing.

~~~
21echoes
they wouldn't be a merchant sending their own MCC-- they'd be a card processor
on the Visa / MC / etc networks.

------
cantrevealname
Slightly off topic, but it's sad to see so much brainpower and energy go into
"innovation" in the financial sector.

We (society) have created a complicated game involving credit cards and we
have to continue playing the game otherwise we lose. Merchants charge higher
prices because they need to pay a 2% merchant fee, then the credit card
"rewards" us with 0.5% back. Madness.

If the blizzard of credit card features--cash back, reward schemes, loyalty
plans, interest options, perks, airline points--all disappeared, it would be a
huge _net_ benefit to society.

I realize it won't get fixed. It's sort of like simplifying income tax
legislation. Almost everyone would benefit even if the amount of tax collected
remained the same, but there's no mechanism to even start doing it. Same thing
here with the credit cards.

~~~
a2kadet
I'm pretty sure loyalty programs are good for the smart consumer. I would
speculate credit cards were all competing with one another while charging a 2%
fee. They all wanted to go lower but couldn't and needed something to compete.
Enter loyalty programs, designed to attract your attention but be too
confusing to actually use.

TL,DR - I would guess cutting loyalty programs wouldn't lower credit card
fees.

~~~
dangrossman
The interchange rate charged by the card network (Visa, MasterCard, etc) is
determined by the type of card presented. Rewards cards are charged a higher
fee _because_ they're reward cards (the rate is literally called "CPS
Rewards"), and that extra money ends up back with the card-issuing bank who's
paying the rewards. If you head into your local convenience store and pay with
a cash-back card, that store will lose a larger percentage of your transaction
than if you had handed the very same cashier a basic non-rewards card.

[http://usa.visa.com/download/merchants/visa-usa-
interchange-...](http://usa.visa.com/download/merchants/visa-usa-interchange-
reimbursement-fees-april2013.pdf)

------
nationcrafting
Somebody should come up with a service to unify Coin, Echo and Wallaby cards
into a single card.

~~~
meowface
But naturally there should be at least one other competitor for a service like
that. _Then_ we'll need another service to combine the two aggregator-
aggregators into a single super ultra card.

~~~
hack_edu
Its perfect, and the future business model of 2014:

The product that helps startups help startups that help startups... help
startups. Sign up for more details!

~~~
nickpinkston
Startups as a Service

~~~
krrishd
Soon it'll be (startups as a service) - as a service, SaaSaaS

------
gbelote
It's impressive to see the collection of Coin competitors hit the HN frontpage
and comments today. Best of luck to all of them!

~~~
gfosco
I was more surprised at the incredible amount of buzz generated for Coin as if
it were some totally new idea. I couldn't think of the name for most of the
morning (Protean Echo,) but I remembered seeing this concept a year ago...
Very happy that the others have been posted so people can realize it's not new
or unique. As for the idea itself, I find it hard to believe the market for
extreme-first-world-problem-users is large enough for any one of these
companies, let alone all three. My morning commute photoshop:
[http://bit.ly/1at9PLO](http://bit.ly/1at9PLO)

~~~
atwebb
You don't have to be new or unique, you just have to be better (but no
competition would help).

~~~
troymc
Sometimes, you don't even have to be better (e.g. VHS vs. Betamax).

~~~
aidenn0
VHS was better than betamax; it cost less and could record football games.

------
elmin
I don't understand how this could work. How can they 'forward the purchase' to
the appropriate card in such a way that the receiving card still sees your
purchase as being from a 'gas station', or 'grocery store'.

~~~
HelloMcFly
Maybe similar to how Paypal does it when I pay through PayPal with my credit
card?

~~~
dangrossman
PayPal doesn't do any passing-through. The entity you are paying is PayPal,
and separately PayPal is putting money into the recipient's PayPal balance.
You wouldn't get a gas station discount even if a gas station created a PayPal
account and accepted your card with a PayPal terminal.

------
ghughes
Their security page [1] needs some work: apparently they "use SHA 256-bit
encryption across all of our solutions" and "your personal account information
is never compromised". SHA-256 is a hash algorithm, and it's not very clever
of them to state that users' PII is _never_ going to be compromised. Someone
with an ounce of computer security knowledge needs to rewrite this page,
quickly.

[1] [https://walla.by/security](https://walla.by/security)

~~~
meowface
>"use SHA 256-bit encryption across all of our solutions"

Would love to see tptacek's reaction to that line.

------
gesman
Hacker News suddenly got under attack from onecard and alikes ...

~~~
KamiCrit
Now we just need a onecard for all these onecards.

------
null_ptr
Sorry, but ccTLD domain hacks and financial services don't mix well. Financial
services should be stable and secure, their front page even embeds a Vimeo
video over plain http.

~~~
dm2
I don't think there is a way to fix the https Vimeo issue. It's been a problem
on a couple of the sites I've worked on for years and Vimeo acknowledges the
problem but refuses to fix it.

------
lsh123
Interesting... Suppose it is a Visa card on the frontend and then on the
backend I have Amex linked. Will the merchant be hit with Amex fees? Will it
be accepted if merchant doesn't accept Amex?

------
josephagoss
Paypass/Paywave? If they can't duplicate chip+pin and wireless payments they
will never hit the Australian market.

~~~
j15e
Canada & Europe too!

~~~
derstang
We need to launch in one market first. We intend to do chip solutions in the
future.

------
jesalg
At first glance, this seems to have a better value proposition for the
consumer compared to Coin.

~~~
saadshamim
coin takes in debt and gift cards - which is more convenient for me, wallaby
seems to be only for credit - I only have one credit card, I didn't even know
you got rewards for using them.

------
bhaile
Launched in Summer of 2012.
[https://news.ycombinator.com/item?id=4161916](https://news.ycombinator.com/item?id=4161916)

I had signed up and was in the second batch of users. First 1,000 users got it
for free for life. Next batch got it one year for free.

I never got the card though. Something related to demand was too high and then
nothing.

------
pmorici
With the rise of Bitcoin aren't all these all-in-one credit cards just a Blu-
ray player in an iTunes/Netflix world?

~~~
ubercore
Bitcoin has a long way to go in terms of proving security (not algorithm
security, but practical "in use" security) and convenience before it it's a
Blu-ray/Netflix dichotomy. These last few weeks, with millions of dollars lost
in bitcoin hacks reinforces that perspective, I think.

------
rexreed
I wish I could see some customer validation videos where they went on the
street and asked random consumers and merchants if they would find this
product (and Coin and others like it), useful as well as hear their concerns.
Since I doubt that sort of customer validation work was done in that way
(random users vs. specific focus groups, if at all), my impression is that it
would be a video full of people saying "eh, maybe, but what about..." or "no,
I don't have that problem" or "yeah, it's interesting, but I don't use my
card(s) that much or in that way"... or "yeah, but I won't pay extra for that"
or maybe "sure, I like it as a consumer" or "sure I'll accept that as a
merchant".

------
nostromo
Could I put all my credit cards in a Wallaby Card, and then put my Wallaby
(and debit and reward cards) on a Coin Card? If so, I'd have just one card
(Coin's pain point), but I'd also get Wallaby's "smart routing" for miles
(Wallaby's pain point).

~~~
dangrossman
Even better, get the Loop case for your phone and carry zero cards. It
emulates the signal the reader would get from a magswipe wirelessly, so you
just hold your phone near the reader. It's supposed to work with
credit/debit/loyalty cards like Coin and is shipping soon, not next year.

[http://www.kickstarter.com/projects/loop/pay-with-
loop](http://www.kickstarter.com/projects/loop/pay-with-loop)

~~~
darkmighty
Not a huge issue but this device likely makes it pretty easy to intercept your
mag card data.

~~~
dangrossman
How so? It's extremely short range, the only thing that can read it is the
terminal you were about to give your card to anyway. It's not broadcasting
while in your pocket, so nobody's going to read your card by bumping into you.

------
sciguy77
So I've got 3 so far: Coin, Wallaby, and Echo.

Hell, I think I'll build one this weekend, just to be included. :)

~~~
cardaggregator
I'm going to build a service that let's you combine your combined cards

~~~
sciguy77
Well I'll get the last laugh because I'll be combining all the card combining
combiners.

~~~
serf
"Card combining combiner is intrinsically worthless and worth 500b dollars."

------
clarky07
Interesting that every payment card solution but the one that I actually find
interesting is on the frontpage right now [1]

[1] Loop -
[https://news.ycombinator.com/item?id=6737688](https://news.ycombinator.com/item?id=6737688)

------
ekorz
For me, and for many others I'd imagine, maximizing my credit-card-rewards
does not trump having control over which account I'm using. Coin is better
suited to my needs.

------
SumantChhunchha
WallaBy + Loop will make a good combo - put all your cards in one WallaBy card
and put one WallaBy card in to Loop. So your phone will have only one card and
your point of control will be WallaBy. Hiding all other cards details - block
one card and you are safe. Coin card is not going in the right direction i
feel. Time to loose the card stuff now...

------
mgambrell
I would assume most people use cards based what they're associated with (i.e.
Business, Personal, etc) not based on rewards

------
memracom
No chip and pin? How could this possibly work?

~~~
derstang
In the US you don't need chip and pin. Look for it down the road.

~~~
smsm42
Interestingly enough, I've just got a new card from one of the major banks and
it has the chip. Looks like US banks starting to warm up to this chip idea.

------
saadshamim
The main problem with cards, isn't necessarily the number, rather the speed.
Nfc is the fastest implementation so far and both my credit and debit card
have it, and I will gladly carry around an extra few millimetres in my pocket
to speed up the transaction process.

------
Geee
I can't understand why you people use more than a single card for payments?
That solves all the problems that these Coin and Wallaby cards are trying to
address. Rewards are bullshit anyway, I buy stuff from honest companies
without any kind of reward systems.

------
adamzerner
The value they offer seems to be: get you the most rewards by using the right
credit cards.

I'd like to see some numbers. Are there beta users? If so, how much are they
saving? If not, how much does Wallaby predict they'll save their customers?
.1%? .5%? 2%?

------
ryanjm33
Sounds like one of the top stories from yesterday:

[Coin a step in the wrong direction]([http://www.techendo.co/posts/coin-a-
step-in-the-wrong-direct...](http://www.techendo.co/posts/coin-a-step-in-the-
wrong-direction))

------
joetech
Great concept, but I don't know how comfortable I am giving them access to all
my accounts when all they do for me is choose which card to charge. And how do
the purchases show on my card statements? Are they all from Wallaby now?

------
logician76
At Costco, you can only pay with American Express and at their gas station and
store register, the card also doubles as a membership card, so since they
don't explain how their card works I doubt that it would work for Costco.

------
dvetrano
It looks like this product has been around for a year already:

[http://imgur.com/C2A1vYQ](http://imgur.com/C2A1vYQ)

[http://vimeo.com/44223249](http://vimeo.com/44223249)

------
CmonDev
A Belarusian start-up? Nice!

~~~
thomasjames
I was thinking the same thing. I wonder if there are any consequences to
having Belarus have domain over your--well--domain. It is a modern country
with a well educated populace, but its government is Europe's last
dictatorship. I imagine there aren't consequences, but you have to wonder if
the founders considered any of the legal issues with spinning the globe to
find a country with a matching top-level domain.

------
faramarz
What if i'm doing an online purchase? How do I charge the Wallaby Card when my
only options are Visa, MasterCard and American Express.

Really interesting concept. Canada, just get it to Canada!

------
alternize
so, what's their business model? data mining?

------
mikegagnon
The problem with the world isn't too many physical credit cards. It's too many
lines of credit.

------
nayefc
Is bonuses such a big problem? I've never had any card had a bonus for a
limited time.

~~~
fpgeek
I have several with time-varying bonuses (Discover and at least one other
change their bonus categories quarterly and there are other specials for other
cards). Beyond that, many of the bonuses have caps and other interactions
(e.g. sometimes Discover's bonus on Amazon transactions is better than the
original card). Something that manages the transaction routing for me is
valuable, even beyond consolidating cards.

~~~
derstang
Card rules vary frequently, down to daily. Also, many rewards have limits
(both min and max). Wallaby helps you keep track.

------
OafTobark
I signed up for one way back and never heard from them. Not going to bother
now.

------
jduck
It's a pyramid scheme! Soon we'll have a meta-meta...meta-n card.

------
beachminter
the wallaby card sounds pretty awesome. i just checked out their mobile app
and tested a few places out and the rewards were accurate on my Chase Freedom
(which has rotating categories each quarter).

------
d0m
As it goes "It's all in the execution", good luck!

------
talhof8
Am I the only one confused about this coincidence?

------
mkramlich
This is getting to remind me of XKCD on standards. The wonderful thing about
having too many standards is that somebody comes along to create a new
standard intended to unify and replace all the other ones. Then you have N+1
standards to choose from.

That said, I do think adding an extra level of indirection to any
customer/merchant transaction event is a Good Thing. Allow the customer to pay
in any manner he chooses that otherwise satisfies the merchant. While doing so
in a way where the customer can be confident his payment
identity/authorization is not hijacked and repurposed, or reapplied, or
_TRACKED_ , without his permission or knowledge. We still seem to be in this
era where POS payments are catching up with what software engineers knew at
least decades ago would be a smarter solution.

