Next Card To Be Dealt

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CULVER CITY, Calif.-Not too far down the road, credit unions may offer members a credit card that displays a member's balance, available credit, and delivers an ad pitch on a small LCD screen.

That technology is being piloted by a few banks this year, providing a glimpse of what could be the next wave of payment cards.

MasterCard has announced it plans to work with U.S. banks this year to deliver to consumers cards with embedded computer screens. The smartcard connects the EMV payment contact chip to an embedded LCD display. Every time the card is used in an ATM or standard POS terminal, the transaction authorization request is routed to the issuer via the MasterCard network and replies back with a MasterCard EMV script as part of the authorization response message. The script is then executed by the terminal, which uploads the relevant information to the payment card.

"The NagraID Security MasterCard Information Card is the most advanced payment display card. It's the Swiss army knife of payment cards," said Cyril Lalo, CEO of NagraID Security, which makes the card and has partnered with MasterCard on the effort. "Customers want access to information about their accounts at their fingertips."

Lalo told Credit Union Journal that U.S. banks are expressing interest, including Bank of America, which is piloting the card. Lalo expects more widespread use by the end of the year.

Lalo said the smartcard looks and functions like a standard magnetic stripe card, but enables cardholders to generate dynamic one-time passwords, providing strong authentication. The one-time password can be activated by card issuers as a dynamic card verification code (CVC2) or as an on-card activation of MasterCard SecureCode, an online security service to guard against unauthorized use of a consumer's MasterCard card while shopping online.

The concept for the card has been in play for several years, noted Lalo, and NagraID had been seeking ways to economically incorporate the small LCD screen, find a way to extend battery life to three years, and make the card durable enough to withstand everyday use. He said those barriers have been overcome and cost for the card today is about $10.

Lalo said the card is actually less expensive than digital tokens, when considering costs to issue tokens and manage them on the back end.

MasterCard emphasized the security advantage of the smartcard. Mario Shiliashki, SVP, group head of U.S. emerging payments for MasterCard Worldwide based in Purchase, N.Y., said, "We believe the use of a dynamic CVC2 will enhance the security for the cardholder and the issuer, complementing the security features of our products that have always served our customers and cardholders."

Shiliashki said MasterCard is focused on driving new technologies to meet the evolving needs of consumers and financial institutions. "That includes identifying, developing and evaluating various options to develop a better e-commerce shopping experience. In the display card, we believe we have a key element of a solution that helps make life easier for consumers by enabling simple, safe, and convenient remote payments."

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