Card-manufacturing startup Dynamics Inc. this week is unveiling details of Card 2.0, a computing platform usable in payment cards that changes the information on magnetic stripes and erases the stripe data when turned off.
The Santa Clara, Calif.-based company is exhibiting the product at Demo Fall 2010, an emerging-technology conference being held Sept. 13 to 15 in Silicon Valley, Calif.
During the conference, Dynamics is demonstrating two so-called Payments 2.0 applications.
In one, a multi-account card includes two buttons on the face, and next to each is a printed account number and a light source. The user can select an account by pressing one of the buttons, which turns on the display light. The card then transfers the account information to what Dynamics calls the Electronic Stripe. The user then can use the card in any mag-stripe terminal.
In the other example, the device includes five buttons on the face and a paper-thin flexible display, which hides a portion of the cardholder’s payment card number. When the user turns the device on by entering a personal unlocking code on the card, the full card number appears on the display for use in conducting card-not-present transactions online. The technology in the card also populates the Electronic Stripe with the correct information for use at the point of sale. After a period of time, the display turns off, and the mag stripe erases itself, making lost or stolen cards unusable.
The Card 2.0 devices are designed to last three years on a single battery charge.
Robert McKay, managing director at Accuity Inc., a Skokie, Ill.-based data and software-services firm whose products are designed to ensure payment-transaction efficiency and regulation compliance, says he can envision practical consumer uses for the technology. Accuity and PaymentsSource publisher SourceMedia Inc. both are owned by investment firm Investcorp.
“Significant percentages of the population have a debit card and a credit card from the same issuing bank, and I can see the power of enabling consumers to carry one less card in their wallet and to seamlessly choose at the point of sale which account to use,” he says.
However, McKay questions the security of the multi-account card.
Jeff Mullen, Dynamics CEO, declined to comment specifically on how the cards would combat skimming of the mag-stripe data, suggesting instead that the company has other technology to address such fraud.
Card cost is “confidential,” Mullen says. However, he suggests issuers should view the products as “revenue generators” and not as “cost centers.” They reduce costs by reducing fraud, so it increases the value proposition, Mullen says, noting issuers may use the company’s products for specific purposes, such as for advanced loyalty, money management, fraud reduction or security.
Mullen declined to say how many cards U.S. financial institutions may have ordered, saying he did not want to speak for card issuers.
“Before the end of the year, you should see very exciting announcements, but we will allow the issuers to announce them on their own timetables,” Mullen says.
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