Good questions. I've grouped the security concerns into three classes: Counterfeiting, tampering, and source-trust.
Good, those are indeed the 3 main aspects I foresee.
Quote
Source-trust means that you have to trust me [
]
Let assume that for granted for now
Quote
Counterfeiting is the problem of others copying our cards and passing them off as real (presumably without even including the private key). Our cards are fundamentally hard to manufacture. When handling Bitbills, always check that the design matches the one shown on our website to make sure it's an authentic card. We use holograms that are very difficult to replicate. As our business grows, we plan to implement more and more security features.
If you were able to produce those cards yourself, do you think it would be hard for anybody to produce the same? I don't think you invested thousands and thousands of money in that process. So, as long as you can do it, other people can. They only have to be able to do it for a value of less than the facial value.
Also, introducing new security features that cannot be copied (looks hard) is worthless if you already have cards in circulation. People will simply use those cards.
Quote
Tampering is the problem of people extracting the private key without it being visible. We put the private key actually inside of the layers of plastic, so it's not just a simple matter of carefully peeling off a sticker or anything. The hologram is directly on top of the private key, also within the plastic. Even if it is somehow covertly extracted (once you see one of these, you'll see just how impossible that seems), the hologram destructs when removed.
Let's take that for granted. After all, lotteries are doing that everyday.
Quote
We're working hard to make sure Bitbills are as sound as bitcoins themselves (if not better, since they clear instantly). But remember, like all the best stuff, they are BETA 
I hope I don't sound to harsh. I'm trying to be constructive. All I know is that I would gladly accept to be paid in BTC for anything but I'm still unsure about accepting a card like yours.
By the way: what is your business model? How would you gain money from a 5BTC card that I buy 5BTC (presumably?). (I see one potential business: selling to an higher rate against dollars but I don't know which is yours).