How Card 2.0 Will Change the Credit Card Industry

by Mercator Advisory Group 0

Technologists have not yet abandoned the payment infrastructure of mag stripes. A new firm has developed a product which could solve the age-old problem of too many card in the wallet:

Dynamics Inc. currently has two products using the patent-pending Card 2.0 technology, MultiAccount and Hidden. Both have a tiny microprocessor embedded into the cards, allowing multiple accounts to be combined into one card. The cards can last up to three years on a single battery charge. Mullen says the cards have been stealth tested with several major banks

and will be launched “soon”. However, it appears that the cards will be launched by banks themselves, perhaps limiting consumers’ ability to combine accounts across multiple banks on one card.

MultiAccount combines two credit or debit card accounts on one card. Both account numbers are printed on the card and users can choose which account to use for the transaction by pressing the button next to the account number. This button is as thin as the credit card. Pressing the button will encode the Electronic Stripe at the back of the card with the relevant account details. The card can then be swiped through the magnetic stripe reader. After a certain interval, the Electronic Stripe will be decoded.

Not mentioned are some thornier issues. The vision of multi-issuer cards presumes banks’ can resolve the branding of these cards; bank and co-branding partner branding on credit and debit cards is still an important marketing issue. And if branding real estate issues could be resolved, why not make the move to mobile-based devices not tethered to mag stripes? Then there are the details of network approval and international (EMV) acceptance.

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