“Smart” Credit Cards Offer Comfortable Bridge towards Mobile Payment

by Matt Klassen on May 28, 2015

The world simply isn’t ready for the mobile payment revolution, at least that’s what several financially oriented tech start-ups are clearly banking on. Instead of pursuing digital payment options like Google Wallet or Apply Pay, several technology companies are taking a more familiar route to push the evolution of financial transactions forward, transforming the classic credit card into a comprehensive payment solution.

This new generation of all-in-one payment cards, or “smart cards,” embrace the familiar credit card form factor, but instead of each card simply connecting to one credit or debit account, one single smart card can include all of the payment information for the various cards that routinely clutter our lives, offering practically the same simplicity of mobile payment in one dynamic card that requires little to no additional infrastructure or adoption from vendors or consumers.

So while the world stumbles and fumbles towards the impending mobile payment revolution, the new smart card now stands as the natural bridge to get us there, offering consumers the same medium as previous credit cards, but transforming what the card can do and the security it is able to offer.

While currently such cards are still in development, they essentially work like this: a card—not unlike a credit card in shape and size—is enhanced with Bluetooth connectivity, which it uses to access the various accounts you have established on your smartphone (which you’ll need to have with you for any of this to work), which it then uses to operate as any kind of magnetic strip activated card you may have. Whether it’s a credit card, rewards card, gas card, you name it; a smart card can replace them all.

Now of course the big attraction of these cards is the upgraded convenience, for while you still have to carry a card—as opposed to mobile payment solutions that work directly from your smartphone—you only have to carry one card, as opposed to a wallet full of such annoying pieces of plastic.

Four companies currently lead this credit card evolution, Stratos, Coin, Swyp and Plastc, and they create a digital card in a unique way, including a magstripe reader—much like you see with Square or PayPal card readers—with each digital card purchase, which users then use to “load” their various cards onto an account on their smartphone, which is then transferred via Bluetooth onto the card itself.

So how can one magnetic strip contain the information for so many different kinds of cards? When you select the card you need to use, an induction coil implanted in the card delivers a signal that reprograms the magnetic strip itself.

Aside from convenience, there are added security and financial management benefits to the card itself. In order to use the card not only does the user have to go through an identification and verification process to even load the card, but PIN numbers will be required in addition to a neat little feature that shuts down the card if it gets out of range of your smartphone, requiring a unique button sequence password to re-engage it.

Further, having one dynamic smart card will allow users to manage their spending, reward points, and everything else for that matter from one convenient hub, offering better financial analysis and budget tools.

Truthfully while a smart card may actually seem to be a step backwards in the mobile payment revolution, as it still needs a card as a bridge between the vendor and your smartphone, let’s be honest and say it’s abundantly clear the world isn’t ready to ditch their cards and embrace purely digital payment options just yet anyway.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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