> loss of branding on their cards and the additional fraud risk
Loss of branding is a fair point, but I think this would reduce fraud risk. Automatically deactivating itself when lost or stolen more than makes up for the risk of trusting Plastc.
Possibly although the attack surface of this kind of solution is quite a bit bigger than that of a traditional card. Introducing complications like smartphone apps and increased complexity of programming on the card itself, has quite a bit higher potential for exploitable bugs compared to a traditional Chip & PIN card.
Not for any particular technical reason (although I'd be very interested to hear how they plan to make this work with Chip & PIN) but from a risk/liability perspective.
At the moment most banks that I'm aware of provide an online fraud guarantee and a credit card fraud guarantee, so as long as you keep your credentials secure, they'll pay back if you get defrauded (I know it's not quite as simple as that but for the purposes of this comment I think that'll do)
so the problem with this kind of product is that you're adding another company (plastc) to the trusted list, you're going to have to provide them with all the card details. So unless the banks agree to this not affecting your fraud guarantee, you'd be taking a real risk by using this solution.
For the banks to agree that there would need to be something in the deal for them, to compensate for the loss of branding on their cards and the additional fraud risk.