FRAZER, Penn. -
So far, 15 credit unions disbursed throughout the country have invested a total of $4.2 million in Xcard Systems LLC, a CUSO that is looking for more than $6 million to fund the start-up, according to Deb Jones, senior VP of Members Gateway, the credit union incubator that is participating in the project.
Creators of the card, which features biometric identification, met earlier this month in California with more than 100 CU executives and representatives from CUNA Mutual Group to gauge interest in the project and try to market $100,000 shares in the limited partnership.
Among the early investors are American Heritage FCU, Freedom FCU, Belco Community CU, San Antonio FCU, Mazuma CU, Nevada FCU and Keystone FCU, where Xcard creator Mark Cox has been a long-time member.
“This evolved over the last four years,” said Cox, referring to the growing number of data breaches that are costing credit unions increasing amounts of money to resolve. “It evolved from what I realized was happening to credit unions, basically wiping out their card portfolios.”
Built-In Security Features
The card 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.
Moreover, the card has been authorized and can be used as a MasterCard, Visa, Discover or American Express–all at the same time. So it eliminates the need to carry multiple cards.
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.
The card is as thick and weighs about as much as a normal credit/debit card and can be affixed with the brand and logo of any credit union. “This is the new wallet of the next age,” said Cox. “You can put anything in your wallet on this card.”
Among the issues being worked out is the cost of the card, which will come with a pod and a docking station so it can be reprogrammed to add new functions as they are introduced. The cost was brought down from $60 per card last year, and is now around $24.
Plans call for the card to be owned and distributed by credit unions, then introduced to a larger market, including banks, according to Cox. “I’ve got control of this project through credit unions and that was my reason for doing it this way from the very first day,” Cox told Credit Union Journal. “I want to give the credit unions something they can control.”
IBM, which is participating in the project, is putting the finishing touches on a prototype, and a pilot program among some of the investing credit unions is planned for the end of the year. “After we get the thing financed and ready to go, then we’re going to invite the banks in,” said Cox.
Cox, who does his banking through Keystone FCU, said he has been a loyal credit union member for more than two decades, when his parents, both teachers at one time, introduced him to the former teachers credit union.
