"The purpose of the XCard is to provide a secure method of managing financial institutions' and retailers' financial data, as well as consumers' financial and personal data," Cox said.

According to XCard Systems, the card is compatible with all point of sale device technologies and has the ability process contactless-style transactions, chip and PIN as well as the industry standard magnetic stripe technology. The ability to secure "vulnerable" magnetic stripe technology will be possible through the use of a magnetic stripe emulator coupled to biometric authentication before initiating a functional transaction. This permits the card to be used only once per authentication and essentially combating skimming fraud associated with credit card crime.

Discussions began about four year ago to implement the XCard, said Fred Gunther, vice president of business development, XCards Systems and XCard Holdings. XCard Systems has been restructured to market and help implement the XCard, said Deborah Jones, senior vice president, strategic development with Member Gateways. Gunther said it sought out several industry leaders to align with to help engineer and develop the card and eventually partnered with IBM Global Engineering Solutions primarily because of its track record and its "lion share" of the market.

"They're behind it 100%," Gunther said. "We've gone through a progression of steps [over the past four years] and right now, were in the phase of producing the card. It is being constructed as we speak."

Jones said three to five credit unions will participate in the card pilot, which is scheduled to start in June 2008. A marketing team will work to offer the card from a credit union perspective, she added. Credit union personnel, not members, will test the card.

"We want them to look at a prototype and the usability" in determining marketing strategies, Jones explained.

Gunther said the XCard could be an innovative way to boost sagging card portfolios at some credit unions, create more revenue and attract new members. The card will not have to be reissued "when data is compromised from back end systems." A five-year card life means fewer cards will have to be reissued and only one card is needed for all the cards a credit union issues.

The credit union industry is the ideal spot for testing because of the affinity that members have for the financial institutions, Gunther said.

"We felt that credit unions were the best place to come because of the membership model," he explained. "We felt credit unions would create and encourage a confident position."

According to the CUSO, IBM Global Engineering Solutions recently produced a whitepaper on the XCard stating it "represents a monumental advancement in the way credit card data is secured." The paper also noted the" unprecedented flexibility of the card, discussing how user and environmental adjustments can be made to the card without a re-issue."

"This technology will not only change the way credit unions protect their members' information, we expect it to change the entire card industry," Jones said. "Member Gateways is looking forward to working with credit unions interested in introducing this major technological development to their memberships."

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