Lemon , a mobile money management startup, just landed $8 million in Series A funding to launch its new Smarter Wallet app that is designed to replace your physical wallet. (Related: What does this mean for the chiropractic industry ?)
The company says its "groundbreaking" app is designed to be incredibly easy to use, and indeed its main mechanical function couldn't be simpler: It captures an image of a physical thing in your wallet and digitizes it (recognizing characters and figures) so that you can throw receipts in the recycling bin and keep many of your loyalty, membership, and even credit cards safely at home. The app is secure with 32-bit encryption and allows you to remote-wipe the information contain within should you lose your phone (another option is to use Apple 's FindMyiPhone  system to erase the entire device).
Cofounder Wences Casares tells Fast Company that the app is useful in a number of situations--including, say, while lying in bed and finding that you need to tap in a credit card number to perform an online purchase. But Casares noted that "once you have all this information in your phone, you find yourself reaching out for it even when you've not lost your wallet." This could be the case, for instance, the next time you need to have your health insurance number at your doctor's office.
But what about those stores that will want to see the card to believe you're a legitimate member of their loyalty scheme? This could be a usability flaw. Not so, says Casares. "You know, that's not a problem with loyalty cards that we know of. Generally stores will accept the image, and the image has a barcode or QR code which we reproduce, or a number, and they use that. What is remarkable is actually the opposite: We've seen cases where someone was able to get a rental car and they didnt have their license, but were able to show a picture of their license."
Loyalty cards are becoming more app friendly, and stores are increasingly used to using smartphones for payments. So it's perhaps not that surprising that one of the funding partners for Lemon's new app is Maveron, the consumer tech company from Howard Schultz of Starbucks--a firm which uses exactly this sort of digital loyalty card.
When digital smartphone payments become mainstream all the code that's already built into Lemon to enable it to actually act as a payment vehicle will be hooked up--right now there's simply too much confusion  in the market, and a standards winner needs to emerge before this happens.
One hurdle for Lemon might come in the form of the PassBook app Apple just revealed  is coming in iOS 6. It is similar enough to Lemon in a few ways. Again, however, Casares is not concerned. He was, in fact, pleased with the news as it "validates the ticketing and couponing compartments of Lemon's Smarter Wallet strategy."
As Lemon can scan credit cards, IDs, and reciepts, ultimately Apple may see this sort of app as a gateway app that gets consumers hooked on digital wallets, before it (possibly) sweeps in with its archive of over 400 million iTunes credit card details and launches a full payments solution of its own.