California startup Final has developed a payment card that can generate a new number for each transaction or each separate merchant, with the aim of helping to combat the banking data breaches that have been plaguing online payments.

Payment card with code-changing functionality to limit fraud impact

The Target Data Breach of 2013 was one of the biggest thefts of payment card data and customer information ever seen in the United States. The following year, 2014, was in turn marked by a record number of cyber-attacks targeting large companies, leading President Barack Obama to put forward a number of legislative bills to help combat card hacking. With the bill for banking fraud approaching $14 billion a year in the US, it has become an urgent matter to improve consumer data protection. Now Final, a startup launched by three US citizens who were themselves victims of the Target data breach, has come up with a way to boost card security. Final’s product is a smart payment card whose number can be changed for every transaction. Moreover, instead of the traditional twelve numbers, the card can generate an infinite set of numbers. You can create a fresh number for every single transaction or generate a separate number for each particular bricks-and-mortar store or retail website that you buy from.

In addition to better security, Final offers an app which helps you manage your accounts.

One card, an infinite number of codes

The basic idea is that if one of the large firms you deal with on a regular basis were to suffer a data breach, you would not have to destroy your bank cards as a precaution, order new ones and then have to endure several days without any means of payment. With Final, all you will have to do is delete the number you use with the firm in question and your card will immediately generate a new one. Final also aims to help its users manage their budgets and accounts with the aid of some simple features, such as putting a ceiling on monthly expenditure at a particular store or website. In addition, you can opt to receive a notification on your smartphone each time a debit takes place, so you can track the status of your account in real time. This could prove to be a very useful weapon against subscription services which are initially free-of-charge but then after a certain period of time suddenly start charging you without any formal notification. With Final, you would receive a notification as soon as the first debit has taken place. You can then cancel your subscription by the simple expedient of deleting the card number assigned to it. Might this encourage shysters? What happens if people use this card feature to stop a staggered payment before they have settled the whole amount due? "In this case, the consumer would still be under the contractual obligation to pay his/her debt to the merchant. In the same way as destroying a traditional payment card does not let you off paying the sums you owe,” underlined one of the Final team. Still, the fact remains that deleting a number is easier than destroying a card. However, such concerns do not seem to have turned off investors: Final has already raised $1 million in seed funding prior to the scheduled launch of its pilot programme this summer.

Plastc lightens your wallet by storing all your cards together on a single piece of plastic.

Several cards rolled into one

Final’s idea is not the first of its kind: startups offering smart cards are blossoming everywhere. The latest is Plastc, also California-based, which provides customers with a means of storing up to twenty debit, credit, or loyalty cards in a single electronic card. You simply swipe through the e-ink screen to choose the card you want, and then swipe the magnetic strip through the card reader. “The card will work seamlessly with existing card infrastructure. There won’t be more expense for a vendor, because it’s the same technology they’re using today,” co-founder Ryan Marquis told information technology website Techcrunch. It also contains a small screen on which you can see your account status in real time, and so check that the purchase you are about to make is within your budget. The smart card’s battery lasts thirty days and can be recharged wirelessly. All you have to do is place the card on the charging mat that is supplied with it. To save on power and extend its autonomy, a small light sensor ensures that the card only lights up when you take it out of your wallet. If the battery runs low, the system will default to the credit card, so you can still use that card until you have time to recharge the entire Plastc device. The startup has apparently also already signed deals with several major American banks, including Bank of America, U.S. Bank and Citi.

There are other companies offering similar devices for storing several cards together in one unit, the best-known being Coin and Swyp. The latter has an additional anti-theft feature: the card blocks automatically when it is taken a certain distance away from the user’s smartphone. As long ago as mid-2012, Wallaby launched a cloud-collected payment card and in the summer of 2013 L’Atelier reported on True Link, a credit card specially designed for senior citizens. Meanwhile some innovators are already looking beyond the credit card, an example being the system developed by Swedish startup Quixter, which enables you to make payments without any card at all, with just a swipe of your bare hand.

By Guillaume Renouard