Photo of digital Redemption cardCiti has become the first bank in the US to sign up
to an innovative new digital card which will allow users to choose
whether they want to redeem loyalty points or pay by credit at the
point of sale.

The card is able to work at any
merchant which accepts magnetic stripe payments, the most popular
payment format in the US, through a digital ‘electronic stripe’. It
provides a powerful loyalty and rewards offering for Citi, and will
also help incentivise higher margin mag-stripe transactions at the
point of sale.

Citi’s 2G credit card features two
buttons that offer customers the choice to either pay for their
purchase as usual or request a point or cash reward.

The product, called Redemption, is
designed by Dynamics, a start-up company led by Jeff Mullen, set up
in 2007. Citi has been testing the digital card since May 2010 and
will extend it to a “select few customers” from November.



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Dynamics’ main technological
innovation is an adaptation of magnetic strip technology, which has
been in use since the 1970s. It has produced a digital card which
has an “electronic strip” that can be written and re-written for
each individual transaction and is read by standard magnetic stripe

This allows a consumer to choose
whether they want to use points or credit to pay for their
purchases without the need for multiple cards.

The cards are as thin and flexible
as traditional plastic cards and the battery is said to last three

“We are excited to be the first
issuer to pilot these advanced technologies and additional choice
at checkout through the ‘next generation’ of credit cards,” said
Terry O’Neil, executive vice-president of Citi’s North America
credit card division.

The new rewards scheme will give
customers more flexibility and control over their credit, Citi

Redemption is the first of Dynamics
products, and Citi is the first bank to use it with mainstream

In September, Dynamics launched two
more digital card products: Hidden, which can provide fraud
protection, and MultiAccount, which enables the combination of
numerous card accounts on one digital card.

The Hidden card has six numbers on
the card face which are replaced by a digital display that is
blank. Even if a fraudster obtains the card, they cannot see the
full card number.

The card is activated by the user
inputting a PIN number using buttons on the card. When the correct
PIN is entered, it displays the full card number and the magnetic
strip rewrites itself with the data necessary to swipe it.

The card automatically switches
itself off and the stripe is erased so the card becomes impossible
to swipe after only a few minutes.

Dynamics’ final product,
MultiAccount, allows users to access multiple accounts from a
single card. It has two buttons on the face of the card and next to
each button are the printed account numbers.

A user can select an account by
pressing one of the buttons. The card lights up the account that
has been selected and the magnetic strip information associated
with the account is then written to the electronic strip.


‘Evolution of

“After years of working with top
card issuers, we are giving the public a glimpse at what many are
embracing as the next evolution of US payments,” said Dynamics CEO
Jeff Mullen.

The 2.0 card received significant
attention at DEMO, an awards event for the technology industry. The
Dynamics card received the DEMOgod award as well as the People’s
Choice award, which won $1million-worth of advertising.

There has been speculation that
Dynamics has partnered with large banks to distribute its cards,
though no announcements have yet been made.

The new cards can be used at existing point of sale swipe
terminals and could prove popular with issuers looking to maintain
revenues on higher margin mag-stripe cards.