Nearly six years in the making, the final prototype of a biometrically enhanced card designed to combat fraud before it occurs is set for a test-run among several credit unions this fall.
The XCalibur card was created by CUSO XCard Systems LLC with assistance from IBM Global Engineering Solutions. Also referred to as the XCard, it aims to function as a “biometrically secured vault” for financial and personal data. It has the same dimensions and feel as a regular plastic card. The owner will have the ability to store multiple credit, debit, gift, loyalty and smart cards within the device. Various levels of security and information stored within the card may be reached by using separate biometric authentications, which is supposed to eliminate the need of remembering passwords or PINs.
In October, employees and board members at three credit unions will test 50 of the cards on traditional devices such as ATMs and magnetic swipe readers, said Vic Pantea, president/CEO of Member Gateways LLC, a product development CUSO that has been involved in the card's pilot. A simultaneous testing for Visa and MasterCard standards will also take place. From these tests, any final revisions will be made and the card device will enter final production.
“One of the key components is to stop fraud. The type of fraud with Heartland and TJ Maxx-that was back-end theft with thousands of records stolen at one time,” Pantea explained.
One of the features that sets it apart from typical debit and credit cards is a biometric touch sensor that authenticates the user before activation. The card can then only be activated by the user or an authorized user, according to XCard. Certain key functions allow the user to pick which account to use for a particular transaction. The security code changes with each transaction, Pantea said.
Several entities came together to make the XCalibur card a reality. CU*Answers is providing card processing and core system testing and Beyond Marketing LLC will market the card. Kent Displays Inc. created the screen display and Seidenfaden Design came up with the prototype sleeve. Prevas Engineering has also played a role in the overall development. Fifteen investors including 13 credit unions, Member Gateways and private investors have provided the funding for XCalibur's launch.
In cases of card breaches, it is typically a costly undertaking to reissue cards to those affected by fraud. Pantea said premiums charged on the bond side are exorbitant. With XCalibur, reissuing is all but eliminated because of the how the card is structured.
“The member impact is 'I don't have to wait for a new account.' You can upload new information immediately,” said Curtis Hays, director of strategy at Beyond Marketing. “In theory, this could replace all your debit, credit and customer cards for grocery stores and retail. You could even use it for municipal transportation systems.”
Pantea said while XCalibur will set its foundation within the credit union industry, he has received inquiries from the medical field on possibly using the cards to store medical records and as security cards for building entry.
“This is a good way for credit unions to take the lead in fraud prevention especially in times when you have many consumers questioning relationships with former banks and credit card [providers],” Pantea said. “This is an opportunity for credit unions to create a deeper foothold.”
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