MasterCard is creating the interactive cards in collaboration with Dynamics, which is receiving a $70 million investment from the credit card giant and other institutional investors in a Series C round of funding. The cards include features like buttons, LEDs, and digital displays, enabling interactive functions like switching between credit and debit cards, choosing different loyalty programs, and using different currencies for international travelers. Perhaps most important, the new interactive functions will enable some nifty new security features, including keypad codes to unlock the card and a magnetic stripe that can “rewrite” itself between uses.
Carlos Menendez, MasterCard’s group executive for global credit and debit products stated: “We see a future where every device becomes a commerce device. This not only includes a shift in mobile-based payments, but also a move from ‘static’ plastic to ‘dynamic’ interactive payment cards and systems.”
Mobile payments facilitated by smartphones are set to soar from $50 billion this year to $142 billion in 2019, according to Forrester, with in-person mobile payments (for example, at retail checkouts) jumping from $3.4 billion to $34 billion over the same period. Still, security remains an issue. A recent survey from eBay Enterprise found that 42% of consumers said they worried about the security of mobile e-commerce transactions this year, up from 34% in 2013.
In that context, it’s worth noting that the total volume of payments on U.S. credit, debit, and prepaid cards, including mobile and good old-fashioned plastic, is set to increase from $4.2 trillion in 2012 to $7.2 trillion in 2018, according to the Jan. 2014 forecast from the Nilson Report. Crunching the numbers somewhat unscientifically, that suggests mobile’s share of those transactions will increase from 1.2% to 2% over the same period.