The MultiAccount card may be more attractive to the financial sector than the “Hidden” card. “It could help the very large card issuers, such as Chase, that have a lot of overlap between their credit and debit accounts,” says Litan. However, convincing banks to invest in an unproven technology will require the potential for a very strong effect on their bottom lines, she says.
Mullen says Dynamics’s cards are significantly more expensive to produce than standard credit cards, but argues that the additional cost is offset by the benefits to a bank. “These cards are significant revenue generators for them, not cost centers,” he says.
Banks already target different types of cards to particular demographics, and use reward schemes to attract new business and encourage heavy use of their products. Cards with computational smarts inside could enable more of that, Mullen argues. For example, a credit card that can suddenly act as a loyalty card might encourage customers to use a scheme that they otherwise wouldn’t.
“Cards with this technology have been used in large numbers in stealth trials in the U.S. since earlier this year,” says Mullen, who adds that banking partners will begin talking about their plans for the technology in coming months. A particular attraction for banks, he says, is that the cards are compatible with existing infrastructure, unlike contactless payments based on RFID chips.
“There are 16 million magnetic stripe readers in the world,” he says. “It’s hard to change that, but easy to upgrade your own cards without building new infrastructure.”
Dynamics is also working on cards that include E Ink-style displays that remain switched on for longer periods, and the company is also investigating a card that can transfer more data. Typically only a third of the magnetic strip on a card carries the card’s details, says Mullen. “You can send messages between card and reader using the rest of that area.”