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Programmable credit cards?

By Leslie McFadden · Bankrate.com
Thursday, September 16, 2010
Posted: 4 pm ET

You can consolidate debts, but in the future you might be able to consolidate credit cards -- literally -- and carry around one card for multiple accounts with the same institution. At a technology conference this week, a startup called Dynamics Inc. demoed two types of next-generation smart cards that feature programmable magnetic stripes, according to a blog at VentureBeat, which co-produced the conference. If credit card issuers adopt the "Card 2.0" technology in the future, consumers could see better security controls on their credit cards and be able to use one card for multiple accounts. The cards aren't currently available.

How they work

With one of Dynamic's MultiAccount cards, the blogger writes, you would press a button on the card to switch from one account to another, and an indicator light would show which credit card number you selected. The card could then be used as normal. A cardholder could use the card to switch from a business credit card account to a personal credit card account at the same bank, for example.

With Dynamic's Hidden card, the front of the card doesn't show the full 16-digit card number. The consumer has to enter a PIN on the card itself to see the remaining numbers on an electronic display. At that point, "the Electronic Stripe is then populated with the correct magnetic information so that the card can also be used with magnetic stripe readers," according to the press release from Dynamics. The screen powers off on its own, erasing the card number on the magnetic stripe and rendering the card useless to a thief that doesn't know the PIN.

Otherwise, the battery-operated cards would work exactly the same as any ordinary credit card. You could swipe them in any card reader and at the ATM.

Talk back: Would you prefer a PIN-protected credit card or a 2-in-1 card over a regular credit card?

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3 Comments
Debra James
September 19, 2010 at 7:50 pm

Thanks for the follow up, Leslie. I went clicked on the link your article, and watched the demo. Yes, it does appear that most of the traditional info is there on the card of the convenience card that loads the info for two cards. It does not seem to change the cardholder name based upon the account selected. So, if this is the spec that will be introduced to the market, it does seem that the cardholder will need to know the account numbers in order to ensure the correct one is used.

The one thing that I found funny is that during the demo for the security PIN-driven card, the presenter stated that 90% of card transactions are through mag-strip readers. He must be including debit/ATM cards, because personally over 80% of my card transactions are not at a POS machine, but are usually online or infrequently over the phone. I am in my 40's and don't like to shop in person the same way that many of peers are use to doing, but I believe that my card usage will be more reflective of card activity as a whole as people in younger demographics start to account for more of the card activities.

Leslie McFadden
September 17, 2010 at 2:20 pm

Debra,

You make some good points. From the pictures and demo videos that have been posted online showing the cards, you can see that they would have the verification code printed on them, along with the expiration date. There does seem to be space for account names -- in pictures of the MultiAccount demo card, each card number is labeled either "Account 1" or "Account 2."The cards are reportedly as thin as other credit cards and can be run through any card reader.

Debra James
September 17, 2010 at 1:52 pm

Although this may be a convenience for cardholders it seems like a good opportunity to accidentally charge something to the wrong account. From what I understand in this article, the onus will be upon the cardholder to know the account numbers to ensure the correct account populates the magnetic strip. I have two Costco AmEx cards; one personal, one business, I don't remember the account numbers, but do know they both have the same expiry date. Unless the programmable card shows me the name on the card I wouldn't know which is which.

The article doesn't state if the 3 or 4 digit verification number is illuminated. I'd need that number if I want to use the card for not-in-person transactions, like online or over the phone.

Having multiple accounts on one card also presents the opportunity to exposure of more financial loss, because the card is lost, there will be a higher credit balance available than with just a single card. The cardholder would not be liable, but in the end the consumer pays for all of the bank's loss mitigation.

Physically, the card would have to be a little thicker than a traditional card. I'd be curious to see who the circuitry would fit in the card, and still be thin enough to slide through traditional POS or insert into an ATM card readers.