During a live webcast from the 2011 Consumer Electronics Show in Las Vegas, Citibank announced that later this year they will be running a pilot program using Card 2.0 a new technology from Dynamics Inc that makes credit cards interactive in real-time.
How Card 2.0 technology works
Ever since the dawn of credit cards, the information stored on their magnetic strips has been fixed it cannot be changed, altered, or updated after a card is created. However Dynamics Inc. aims to change that. Their technology brings credit cards into the 21st century by basically building a card programmer into the card itself.
The possibilities for this technology are endless but Citi will be using it for one very specific purpose in their pilot program the redemption of credit card rewards. They will be issuing cards which have two buttons on them… one button allows the customer to make a normal purchase, however the second button allows the customer to pay for the purchase using the account’s reward points.
This is accomplished by rewriting the magnetic strip’s 1,200 bits of data when a button is pressed. For example, the strip would be programmed with the normal credit card account info for a regular purchase. Then when the rewards button was pushed, the strip would be re-written with different account data for a rewards account. According to Dynamic Inc’s CEO and inventor, to make this possible there are over seventy electrical components crammed into 1/10th of a cubic square inch on the credit card. Surprisingly, the card is said to still look and feel the same as a traditional credit card.
See video: Credit Card 2.0
The inventor’s background
Dynamics Inc was started back in ’07 and the man behind it has an interesting background to say the least. Jeff Mullen previously worked as a patent attorney, but in addition to his law degree, he has a bachelors in electrical and computer engineering as well as an MBA. The initial funding to launch the company came from Mullen and then in 2009 they received $5.7 million series A investment from Adams Capital Management and an undisclosed amount from their partner Citi.
Where will this technology take us? What makes this invention so promising is that it’s compatible with old school traditional credit card readers (since the programming is done on the card itself). Obviously this will definitely make it easier for the market to adapt it.
Sure, it’s a Best of Innovations Winner for Personal Electronics at CES, is it something consumers will actually want? Only time will tell. Last decade banks thought that their RFID technology would be the next big thing (MasterCard PayPass, AmEx ExpressPay, Visa payWave) but those have been out for several years and so far, they’ve failed to catch on with consumers. In fact, I have seen tons of unfavorable credit card reviews by customers regarding the RFID feature.
But if Dynamics Inc’s technology does go mainstream, one can only imagine all the different ways it could be used. Who knows… maybe 10 or 20 years from now instead of carrying a wallet full of credit cards we will just carry one, programmed with all our accounts.
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This guest post was written by Michael, the founder of CreditCardForum.com, which is a social media site for credit card reviews. His site has been featured in the New York Times, the U.S. News & World Report Alpha Consumer, and other media outlets.
