A few years ago, there was a lot of buzz about smart credit cards, thanks to Plastc. The smart payment cards were supposed to combine multiple credit cards into one product with the help of NFC chips and smartphone apps. Plastc began taking pre-orders for smart credit cards in 2014.
Plastc closes without delivering a single smart credit card
Now nearly three years later and after countless shipment delays, the company is entering bankruptcy. This means that the 80,000 buyers who pre-ordered a smart credit card will never actually receive it. In a statement on its website, the company said it officially closed down on April 20 and will be filling Chapter 7 bankruptcy. This means a complete shutdown and a liquidation of its assets.
Plastc introduced itself in October 2014, vowing that its smart credit card would hold the information of about 20 regular credit cards and assist users in paying for products with the help of a smartphone app.
Greenhaven Road Capital commentary for the third quarter ended September 30, 2022. Q3 2022 hedge fund letters, conferences and more Dear Fellow Investors, The Fund is enduring its worst drawdown since inception. We were down again in the third quarter, bringing year -to-date returns to approximately -59%. Returns vary by . . . SORRY! This Read More
Plastc raised around $9 million from 80,000 pre-orders, according to a Magnify Money editorial. The company is not fulfilling any of the 80,000 pre-orders, disappointing all its buyers and financial backers. The company was planning to ship the first cards in the summer of 2015, but of course it did not work out. It continued pushing back the release date until now when it disclosed the news of bankruptcy.
Plastc says that it required money to begin the production of its cards, but with no funds in hand, it had to shut down and let all its employees go. Apparently, the company expected to raise around $3.5 million in February, but the investment group backed out. The company was able to find another investor ready to invest $6.75 million, but that investor also backed out at the last minute, notes Engadget.
“We are disappointed and emotionally distraught, and while we know this is extremely disappointing for you, we want our backers to know that we did everything we could to make Plastc Card a reality,” the company told its backers, according to Gizmodo.
What drove it out of business?
It is not yet clear how (or where) the company used the $9 million it got from pre-orders. Customers are now calling for refunds. The statement on the company’s website does not give any indication about refunds.
It is not the first time that a company like Plastc is going out of business. Just last year, all of Coin’s assets were acquired by Fitbit, according to AndroidAuthority. However, unlike Coin, Plastc will be closing down its business without selling even one smart payment card, which was expected to be priced at $155.
There were also Swyp and Stratos, with the latter nearly shutting down until a new company bought it, while the former was plagued with several issues. It is not surprising that companies like Plastc are shutting down. With the advent of apps like Android Pay, Venmo, Apple Pay and Facebook Messenger, which can work on smartphones and possibly on smartwatches, the notion of smart payment cards was bound to fail sooner or later.