Adding smarts to your bank cards

Here’s a product where the ‘2.0’ moniker could be very apt indeed – bank cards, those rectangular pieces of plastic you get from your bank or credit card company that are essential requirements today for completing purchases online and offline.

A US company, Dynamics Inc, is developing a new generation of bank cards  – ‘bank cards 2.0’ – that gives real meaning to the word ‘smart’ in smartcards (you can get an instant clue to this from Dynamics’ web address: poweredcards.com).

Here’s one example – the MultiAccount card that you see above, a bank card that has inbuilt electronic logic that can modify the card data on the fly.

The device includes two buttons on the face of a card. Next to each button is a printed account number and a light source. A user can select an account by pressing one of the buttons. The card visually indicates the selection by turning ON the light source associated with the selected account. Additionally, the magnetic-stripe information associated with the account is written to the Electronic Stripeâ„¢. The card can then be swiped at any magnetic stripe reader.

The market for such innovation and evolution of pretty old technology must be huge, with rich rewards for the first company to offer a product so compelling that banks will snap it up. Does Dynamics have that?

Venturebeat describes the opportunity facing Dynamics like this:

[…] The ultimate goal isn’t just to upgrade credit-card technology. It’s to transform the existing credit-card business, with cookie-cutter cards and offers, into ones where consumers can give voice to their needs and banks can respond with personally customized offers.

The development could be very significant for credit-card issuing banks that have wanted to upgrade their service to engage and reward customers, only to be stymied by the limitations of magnetic-stripe cards. Every bank aims to be “top of wallet,” or the card that a person will use for 70 percent or more of their transactions. The second card down will likely be used only 15 percent of the time, and the third card, 5 percent. If a bank can offer better rewards, make a card more secure, or otherwise convince someone to use a card more often, the financial gains can be enormous over the life of the customer relationship.

[…] Dynamics stands a great chance at getting past the barrier of older infrastructure. Radio frequency identification tag (RFID) readers are being put in place in more places in order to accommodate electronic cards, but they still account for only about 3 percent of all of the readers in the market, even after billions of dollars in infrastructure investment. Another innovation, near-field communications, requires chips to be built into cell phones and it also means that merchants have to adopt new readers. But Dynamics’ strategy has the most benefit for the least pain. A programmable card fits with the strategies of a lot of banks, which are issuing different cards for loyalty programs or budget management.

Dynamics looks like they will have a very good shot at pushing a market opportunity forward. See what you think – this video has CEO Jeffrey Mullen explaining his offering to a crowd of potential investors, tech influencers and others at the DEMO start-up-centric event in Silicon Valley last week.

The opportunity isn’t just bank cards, either: think about other uses for these smart pieces of plastic – healthcare, memberships, loyalty programmes, added-value services… A long list.

See also Mashable’s video interview with Mullen. A noisy background but this is a man who exudes passion and confidence in his product.

Neville Hobson

Social Strategist, Communicator, Writer, and Podcaster with a curiosity for tech and how people use it. Believer in an Internet for everyone. Early adopter (and leaver) and experimenter with social media. Occasional test pilot of shiny new objects. Avid tea drinker.

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