The main drawback is that while you may be an early adopter of new technologies, chances are slim that every coffee shop, drycleaner and grocery store in your neighborhood is, too. If a virtual wallet loses much of its charm if it’s something you have to carry in addition to a real one rather than instead of it.
The founders of LoopWallet, Will Graylin and George Wallner, call this the infrastructure compatibility problem, and they came up with a solution that’s sort of ingenious: Basically, they reverse-engineered the magnetic stripe reader that most retailers use to swipe credit cards and figured out how to make it a receiver for wireless signals. A magnetic induction loop – hence the name — concealed inside a key fob ($39) or smartphone case ($99) is able to “talk” to more than 90% of existing point-of-sale devices.
Loop isn’t the only digital wallet that boasts widespread compatibility. Coin, which looks and acts like a credit card but can store information for up to 8 cards, offers a similar proposition. Loop executives acknowledge this but say that Coin is too fragile to keep in a wallet and can’t store nearly as many cards as their product.