Emerging Commerce: Dynamic Payment Cards

Payments Leader

Posted on November 6, 2014

Man paying with NFC technology on mobile phone, clothing store


Overstuffed wallets may be a thing of the past, thanks to a clever new payment technology that’s piquing consumer interest. Several startup companies have developed mobile-first “smart” card apps that allow consumers to load multiple payment cards into one universal card. These smartphone-connected cards copy and load all other payment cards in your wallet into one, allowing you to select between cards by pressing a button on the universal card or through a mobile app. Convenient and easy to carry, this new type of payment device is creating a lot of buzz among consumers and financial experts. It’s also raising important questions about security, compatibility and limitations.

How they work

At first glance, these new dynamic card forms look very similar to a typical credit card; however, they are capable of much more. Using a simple card reader that plugs into a smartphone, holders are able to swipe their cards to record all the relevant payment details on the app, which then transmits those details to the device using Bluetooth technology. Users can then select a specific payment method by pushing a button on the card or visiting the app. The idea is simple, efficient and innovative; however, it’s also imperfect.

Concerns and limitations

Although these new card offerings eliminate the need to carry multiple physical plastics, they ultimately operate very similarly to a mobile wallet. Like a mobile wallet, the device won’t function if your phone’s battery is dead. Other issues include the fact that these dynamic cards are not EMV-compliant, meaning they won’t work in other countries where magnetic stripe technology is a thing of the past. Also, many industry experts question whether card issuers will like the idea of their cards being effectively combined with those of other, competing providers; card-branded networks may share the same concern.

Excitement Growing

Despite concern among industry experts, early movers in the field are generating a lot of excitement among tech-savvy consumers. For instance, one card maker reported quickly receiving 1,000 orders for its card only shortly after releasing video of its prototype; hours later, it received another 20,000 orders and within two weeks, videos of its prototype had more than six million views. In other words, there’s clearly a market for innovations like this.

Will the Technology Catch on?

Even though it appears that many consumers are eagerly awaiting the release of these new dynamic devices, industry experts are divided over the technology’s long-term outlook. Some are calling it a stopgap, which will ultimately be surpassed by more comprehensive digital wallets that allow users to pay with a simple tap of a phone.

Kanishk Parashar, CEO of Coin, one of the companies creating this new technology, has said that his company wasn’t looking to revolutionize the payments world when it began creating a universal card, it simply wanted to reinvent a tool people already knew how to use. Time may soon tell whether keeping it simple will be the best approach to success in the ongoing evolution of the payments industry.


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Payments Leader

Payments Leader from FIS provides insights on credit, loyalty, fraud and emerging payments strategies through blog posts from our industry experienced authors.