Here at ITBusiness.ca, we’re used to profiling startups founded by engineers, programmers, or serial entrepreneurs, but Dynamics Inc. CEO and Wallet Card creator Jeff Mullen was simply a patent attorney, a profession that saw him working late hours and often ordering goods online.
“I kept looking at my credit card and started asking myself – could you actually develop a computerized version that could send different information through the mag strip?” he says. “It’s the largest infrastructure in the world and you can’t really change it very quickly, but maybe you didn’t have to.”
Mullen eventually enrolled into the Tepper School of Business at Pittsburgh’s Carnegie Mellon University, spent a few months researching startups to see if others had a similar goal, and concluded his idea could serve as the foundation of a viable business. He won an elevator pitch competition at his school and used the prize money to found Dynamics.
“The next week I went to one of the school’s magnetics professors and showed him two designs for the magnetics portion of the card,” he says. “He said the first one sucked, but the second didn’t suck as much, so we started raising money to fund a prototype of that design.”
Ten years later, including five years of development for which the company raised $110 million USD, Dynamics revealed its signature product at CES in January, where it won an Innovation Award: The Wallet Card, a computer the size of a payment card that could replace all of a user’s debit, credit, loyalty, and even key cards.
“There’s a display on the card’s front, and a number of buttons,” Mullen explains. “You enter a password and the card turns on. Your credit card number is displayed so you can use it for online purchases, and they have striped and contactless chips as well.”
“After you’re done using the card, everything erases,” he continues. “The stripe erases, the chips erase, and the display erases. So if you lose the card or it’s stolen, whoever finds it is left with a dead piece of plastic.”
The card is fully operational; it processed its first payment two years ago, and its reveal at CES was accompanied by several partnerships including Visa, Mastercard, Japanese credit giant JCB, CIBC, and Softbank subsidiary Sprint.
“The banks that represent us can reach about 20 per cent of the world’s population,” Mullen says, noting that for now, CIBC appears to be the card’s leading Canadian partner and has not yet announced when it will release its version of the product. (Dynamics already produces the Tim Hortons Double Double Visa card for CIBC as well.)
Meanwhile, the Wallet Card’s first consumer release is currently planned for sometime this year, Mullen says; users can visit the product’s website to sign up for local notifications.
Powered by three technological features
The card features three unique technological breakthroughs, Mullen says.
The first, of course, is the digital infrastructure that allows the device to replicate a payment card: a 65,000-pixel display on the lower left hand corner where the information usually printed on the front of a card – name, number, expiration date, security code – is displayed; a storage chip that saves the information of any number of cards; and a magnetic strip, EMV chip, and contactless chip that can all be rewritten based on whatever card is selected. It can even be used as a hotel room key.
The second technology is cellular: The card includes a cellphone chip and antenna that operates on its own wireless service, courtesy of Sprint. It is thanks to the security features promised by this technology that Dynamics secured the support of Visa, Mastercard, and JCB, Mullen says: Sprint and its telecommunications partners can provide a cellular signal in 210 countries, and the three payment giants are supporting the card in those same 210 countries.
“Let’s say there’s a breach and 60 million cards are compromised,” he says. “On other cards you’d need to reach a call center or go online to make sure you’re safe or find out what to do. The Wallet Card can say, ‘We deleted your card number two hours ago and replaced it with a new one. Have a nice day.'”
The user can also then visit their local bank and, instead of filling out a new credit card application and waiting for a new card to be delivered, leave with a new card immediately.
The Wallet Card also informs users when their card information has been used made a purchase, so if the user’s card thanks them for a purchase they know they didn’t make, they can immediately deactivate the card and report the theft. Should their card be declined for any reason, the display tells them why.
The Wallet Card also makes it easy to apply for other credit cards, Mullen notes; when making a purchase that requires more credit than they have on hand, users can download another card immediately if they’re pre-approved.
The cellular technology even allows the card to be reprogrammed for special offers; $5 off a user’s first purchase on their birthday, for example, complete with a message wishing them a happy birthday; or an airline points card notifying the user of special offers.
“So it’s not only easy to use, it really provides value for banks in terms of customer messaging,” Mullen says.
The Wallet Card’s third breakthrough technology is a power harvesting chip, which the card uses to recharge itself without any input from consumers, allowing the devices to essentially run forever.
After all, the average card only sees about five seconds of use every 36 hours, Mullen says.
“There are between 18 and 20 billion cards, depending on who you ask, and that number is growing by about five percent a year,” he says. “So by taking the largest device class in the world and making it digital, we’re providing extreme value to the banks.”
The company is also contributing to mobile payment technology, with LG announcing last March that Dynamics would be powering its devices’ magnetic communication technology.
“There is a place for mobile payments, though it’s a much longer path than people originally thought,” Mullen says, noting that unlike the Wallet Card, mobile payment technology requires infrastructure change at a level many companies simply can’t afford.
That said, he admits the Wallet Card is unlikely to replace our wallets with a single card anytime soon, though he says the device has the technological capacity to do so.
“A number of gates exist to replacing your entire wallet,” he says. “For example, government IDs would require government support and implementation.”
Cash also remains the world’s favourite method of payment, he says, reports from Europe or China be damned, representing more than 8o per cent of global purchases.
But with payment cards gaining ground all the time, he believes the Wallet Card can help close that gap.