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.
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.