Credit Card 2.0 Technology Aids in Fraud and Theft Prevention

You may not think of a credit card -- a piece of plastic with a magnetic strip -- as the most technologically advanced device but a company is taking credit cards beyond this level to improve fraud prevention and even allow for multiple accounts on one card.

Ars Technica reports that Dynamic Inc., showed off some of its Credit Card 2.0 technology at the Consumer Electronics Show in Las Vegas, including a card with a special magnetic strip programmed in real time and cleared of data after use (the Dynamic Credit Card). Other cards produced by the company include: a card that requires the users to type in a code on the card itself before use; a card that lets the users chose to use a credit card's points program for a purchase; and a card that brings multiple credit accounts onto one piece of plastic. Here's how Ars Technica describes the device:

The technology is impressive. The cards look and feel much like existing credit cards, and can be kept in your wallet and bent without harming the internal electronics. The difference is that an empty screen replaces a section of the numbers on the card's face, and you have to tap in a key using five built-in buttons before making a purchase. The LCD screen is then filled with a unique credit card number, and the magnetic strip on the back is coded with that number for use in the transaction. Once the transaction is over, the numbers leave the face of the card, and the magnetic strip returns to its blank state.

With this technology, a stolen card cannot be effectively used -- unless the thief has your code -- and credit card numbers are meaningless because they change with each use.

Cards using this technology, you may have guessed, need to be powered in some way. Ars Technica reports that the cards are run on batteries with a three year lifespan. It also notes that some pilot programs using the cards are already underway.

Watch this demo from CES a couple years ago displaying how the card works: