They say it’s the Age of the Consumer because people have more access to a lot of information about any given product they buy or vendor they do business with. But for all that information one thing most of us don’t have much control over is the rewards programs their credit cards generated points towards every time they buy something.
The folks at Dynamics, a provider of a programmable credit card, are out to change that using an e-payment system that could ultimately change the balance of power between developers of retail applications and the banking industry. The basic idea is fairly simple. By embedding a processor in the credit card itself, the card now has enough intelligence to allow uses to click a button on the card that changes the rewards program the card is associated for any given transaction.
According to Dynamics CEO Jeff Mullen, the company has created an open application programming interface that allows developers to create applications that can be integrated with the Dynamics e-payment system, which in turn is integrated with the U.S. payment infrastructure. That capability opens the rewards program marketplace to a broader number of vendors that can now plug their loyalty applications into a payment system that can not only be easily accessed, but also provides a framework for testing applications.
Dynamics has also made it possible to move an existing application running an application on a smartphone or a mobile computing device the ability to port that application to the Dynamics credit card. In addition, end users will be able to download applications to their card via their online billing statement. Customers can also dynamically change who they want to receive credit for any given transaction, which they may want to give to a relative when they purchase, for example, a game or a charity such as Toys for Tots.
Dynamics has already raised $40 million to build out the infrastructure needed to support this new payment system, which can be used to not only drive the adoption of mobile wallets but also make credit card transactions more secure.
At the moment each card can host two applications simultaneously, but more importantly, says Mullen, the data generated during each transaction can be analyzed in real time to help determine what elements of the loyalty program are generating the most amount of interest.
As Mullen notes, the payment systems currently in place are built on top of decades of legacy technologies that conspire to lock customers into a specific credit card that is hard wired to a specific rewards programs. Dynamics is has built a programmable payment system that is not only more agile, but actually creates an open marketplace for developers trying to gain a larger share of consumers’ wallets that increasingly are only going to be open to the vendor that gives the best return on their loyalty.