Credit Cards Getting High-Tech Makeover

It's not your father's credit card. After 50 years of embossed numbers and a magnetic strip, credit cards will soon have more of a 21^st century look.

In November one of the nation's largest credit card issuers, Citibank, will test market a card that features electronic options for the consumer. For example, at the register a customer can push a button on the card to choose whether to use points or pay with credit.

Other companies are developing plastic cards that can be used either as credit or debit cards. What they all have in common is technology. The current credit cards, designed when every transaction was recorded by making an imprint on a small carbon slip by running the card through a machine, will be replaced with one that are powered electronically.

Some of the new credit cards are being designed by Dynamics Inc., which unveiled its new anti-skimming technology this week at BAI Retail Delivery in Las Vegas. After all, the purpose of the new technological make-over is to make credit cards less prone to fraud.

Each year, the payment system loses billions of dollars from fscammers stealing credit card numbers. In fact, all that is needed to steal a credit card number today is a pen and paper or a portable card reader. More advanced fraudsters steal credit card numbers by breaking into merchant servers where the numbers are electronically stored. 

Thwarting scammers

Dynamics' anti-skimming device, called the Dynamic Credit Card, is designed to help protect consumers and merchants against this threat by automatically writing a new, unique dynamic security code onto its magnetic stripe for every in-store purchase. A display can also be added to the card so the card can automatically display a new, unique dynamic security code for every online purchase - thus replacing the three or four digit security code physically printed on traditional cards. 

"The Dynamic Credit Card technology eradicates skimming both domestically and internationally without changing a single card reader or impacting a single merchant system," said Jeff Mullen, Dynamics' CEO. 

The security benefits of new card technology can be increased when combined with other anti-fraud technologies. For example, Dynamic says codes can be added to its Dynamics' Hidden card, where an on-card interface requires a user to enter an unlocking code into the card in order to activate the card. That, the company says, renders a card useless if its is lost or stolen.

Citi calls its new card 2G and has designed it so that the user can change the data on the card's magnetic strip, just by pushing a button. They can still be used like existing cards at existing swipe terminals.