FRAZER, Penn. – Organizers of a credit union-owned payment card have postponed the pilot of the secure card until next year, while they work to raise money for the project in a very difficult financing environment.
"We still don’t have all of our funding nailed down," Deb Jones, vice president of Members Gateway, the credit union incubator that is organizing the project, told The Credit Union Journal yesterday. "Credit unions are holding on to their money."
The project, known as Xcard, has raised $2.8 million from credit union limited partners so far and has another $800,000 in commitments, still short of the $6 million goal to bring the card to market. Organizers are talking to outside investors, including venture capital firms, but have been unable to fill the gap yet, according to Jones.
The combination of the onset of the holiday spending season and the ongoing economic crisis has also complicated a proposed pilot for this fall, she said.
Three of the credit unions investing in the Xcard, Keystone FCU, Mazuma CU and Nevada FCU, are scheduled to participate in the pilot.
The Xcard has a number of security features, foremost of which is a biometric fingerprint reader that will ensure that only an authorized user–the cardholder or a family member–will be able to activate the card. The card also uses traditional magnetic stripe technology, as well as contact and contactless technology, so it does not need new technology and can be immediately used in the marketplace.
In addition, the card has been authorized and can be used as a MasterCard, Visa, Discover or
It can be used as a credit, debit, ATM or smart card, and can store information for loyalty programs, event ticketing or even memberships, such as to a health club. Plans are to give it mobile banking capability so it can be used in conjunction with a cell phone.
Creators of the Xcard will be at the annual Members Gateway meeting in Las Vegas to discuss the progress of the project.
