New Technology Enables Credit Cards to 'Talk' to Each Other and Mobile Devices

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It sounds like something out of "Star Trek," but your credit card someday soon could be "talking" with your mobile device.

Researchers at the University of Washington say they've invented a way for a "smart" credit card — one with a built-in computer chip — to communicate with smartphones, smartwatches, and even other credit cards. The researchers presented their discovery Aug. 22 at the annual conference of the Association for Computing Machinery's Special Interest Group on Data Communication.

The researchers say their creation — so-called "interscatter communication" — converts wireless signals such as Bluetooth into low-power Wi-Fi transmissions that can be picked up by mobile devices or specially equipped credit cards.

As described by TechCrunch, this new technique "eliminates the necessity to produce wireless signals at all. Instead, using interscatter, the device can essentially harvest and re-deploy signals it receives."

Card Communication

As part of their research, electrical engineers and computer scientists at the University of Washington developed prototype credit cards featuring the interscatter technology. According to the University of Washington, the prototypes can "communicate directly with each other by reflecting Bluetooth signals coming from a smartphone."

Vamsi Talla, one of the University of Washington researchers working on this new type of communication, says interscatter technology will need to be incorporated into advanced "smart" cards for the cards to be able to talk with each other or with a mobile device.

'Endless Opportunities'

Talla says this high-tech innovation will come in handy in various situations.

For instance, friends would be able to split a restaurant tab by tapping together their interscatter-enabled cards, he says. Also, an interscatter-equipped card could be enabled or disabled through a mobile device, Talla says. "One can think of your phone as the controller for the card," he says, "and the opportunities for that are endless."

Talla says a mobile app won't be necessary for cards to talk with one another, but it will help ensure that only authorized cards are involved in the communication.

Coming 'Very Soon'

The effect of this invention could be enormous in the United States, where about three-fourths of adults have at least one credit card, according to the Gallup research organization.

Consumers could be using these high-tech credit cards "very soon," Talla says. He says the technology recently was licensed to Jeeva Wireless, a Seattle start-up co-founded by Talla. Jeeva Wireless is working on commercializing the technology.

Security Skepticism

Credit expert John Ulzheimer isn't entirely sold on "talking" credit cards.

"I think my primary concern is the safety of the credit card information if it is able to communicate on an outbound and inbound basis," Ulzheimer says. "If the Wi-Fi signal can be hacked and expose the card information, then it gives thieves yet another way to abuse the payment method."

Talla says the ability to encrypt data being transmitted between cards will strengthen data security. Furthermore, the signals traveling between two cards are low-power and "die" quickly, making it tougher for hackers to intercept data carried by the signals, he says.

Still, Ulzheimer is skeptical about the usefulness of a credit card that can communicate with a mobile device.

"Most card issuers already offer immediate notifications when you card is used, when a new statement is available and when a payment is due," Ulzheimer says.

'Important Implications'

Ian Rubin, leader of the retail banking and consumer payments practice at payment systems company ACI Worldwide, says data security is a concern with interscatter technology. He says the payment industry constantly is fighting fraud by applying industrial-strength technology to credit cards and other payment cards.

Nonetheless, Rubin says he's impressed by this innovation.

The ability of interscatter technology to "derive sufficient power from Bluetooth-based wearables to drive a variety of processes — ranging from health monitoring to payment transactions — has important implications," Rubin says. "For example, the financial services industry continues to seek effective ways to replace cash transactions with electronic payments."

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