Card Aggregator Stratos Enlists Eastern Bank in Test

Stratos Inc., developer of the Stratos card that consolidates multiple credit and debit cards into one device consumers carry in their wallets, says Boston-based Eastern Bank will test its partner program.

Card aggregators, like Stratos, operate on the premise that U.S. consumers want an easier way to manage all of their payment and loyalty cards. They consolidate all of these cards onto one device that is shaped like a card and can be operated in a magnetic-stripe POS terminal. Consumers have to swipe their existing credit, debit, prepaid, and gift cards through a supplied reader to store the payment data in an app.

Then, when the consumer wants to pay at the checkout counter, she finds the Stratos card, selects the stored payment card on the device and swipes it through the point-of-sale terminal. The transaction moves along as though the actual card issued by the financial institution had been passed through the magnetic-stripe reader.

Eastern Bank cardholders who use a Stratos card will have their Eastern Bank-issued cards set as the top-of-wallet card, Stratos says. Eastern Bank has 400,000 customers in Massachusetts and New Hampshire. The cards will be distributed to Eastern Bank customers, but Stratos is unsure of how many, a Stratos spokesperson says.

An Eastern Bank spokesman says the bank will buy a small number of Stratos cards, but that may increase depending on the performance of the test.

Additionally, Eastern Bank will receive payment data, including purchases made across the entire wallet, to learn more about their cardholders’ shopping behaviors. Stratos also will provide a tokenization and encryption service to protect enrolled cards.

Card aggregators typically charge consumers about $100 for their service, with some offering it as a one-time fee and others charging an annual fee. Some payments analysts question the business model for such services, especially as mobile wallets become more commonplace.

“I fail to see a very strong business case for it,” says Nick Holland, head of mobile at Javelin Strategy and Research, a Pleasanton, Calif.-based payments consultancy. “Ultimately, it comes down to people will not pay to pay.”