There's been another company working on this for many years: http://www.dynamicsinc.com/ I've seen the working models, they are decent, but it's a surprisingly hard problem.
Wallaby is a passive/proxy card, routing to a BIN range controlled by them. Cheaper to produce (it's just dumb plastic), more expensive to run (since they're sitting in the middle of each transaction) -- but that's also where they can build value.