If tapping card readers and using smartphones launched the next generation of credit card payment methods, Dynamics Inc.'s latest creation could spark a revolution for rewards.
The Cheswick-based company already known for innovative credit and debit card offerings -- its MultiAccount card merges multiple accounts into one card and the Hidden card passcode protects card numbers -- is scheduled today to release its ePlate Visa payment device to consumers.
Issued by Kansas City, Mo.-based UMB Financial Corp., the device allows users to choose from dozens of potential rewards programs before each transaction.
Users access an online "experience manager" to choose from a list of "experience apps" that offer rewards ranging from donations to Toys for Tots to prizes from iGourmet's Salsa of the Month Club. Once their choices are locked in, users decide which experiences will earn points by pressing one of two nearly paper-thin buttons on a credit card.
At the moment, the card offers 35 different experience applications that cover gaming, entertainment, hobbies, charity and other areas of interest.
Experience app providers are paid 0.5 percent per transaction.
And while credit card users are accustomed to reaping the benefits of rewards months after they're earned, ePlate users will receive electronic awards almost as soon as they make a purchase.
"Customers will not only be notified of points on the transaction as it happens, but they will get their reward digitally and can fulfill that reward in less than a tenth of a second," said Dynamics CEO Jeff Mullen.
Unveiled during the DEMO Spring 2012 technology conference in Silicon Valley, ePlate is only the latest offering from a company that has lit up the financial services industry since its inception. Founded by Mr. Mullen in 2007, Dynamics has won some of the world's most significant business plan competitions, including the Rice Business Plan Competition, the Carnegie Mellon McGinnis Venture Competition and DEMO Fall 2010's $1 million People's Choice Award.
The company's reputation combined with the creative concept behind ePlate was critical to the joint initiative with UMB, according to George Schmelzel, senior vice president of UMB Credit Card Services.
"We believe that the uniqueness of the ePlate device clearly differentiates it in the marketplace and will improve the consumer's payment experience," he said in a press release. "As one's needs and interests evolve, the potential benefits can be changed to match."
Dynamics' climb helped it attract more than $40 million in investment funding over the past five years, including a $5.7 million in Series A funding from Sewickley-based Adams Capital Management and $35 million in Series B funding from Boston-based Bain Capital Ventures.
The cash allowed Mr. Mullen to move the company from its McCandless office to an 130,000-square-foot Cheswick office building with enough space to manufacture cards and electronic chips, as well as to house a call support center.
The infusion also gave Dynamics the funding necessary to fill the space. Over the past year, the company has grown from around 24 employees to more than 100, including those hired for the newly created manufacturing group and top executives from some of the nation's largest tech companies.
The state-of-the-art location, used by Westinghouse to build torpedoes, features sprawling sections full of industrial robots constructing hair-thin computer chips, a testing area housing every type of magnetic strip reader and a secure vault protected by closed circuit cameras as well as walls reinforced with bulletproof steel and motion-sensing accelerometers.
As one of only 12 East Coast companies approved by the PCI Security Standards Council to apply credit card numbers to cards, there's no such thing as too much security, according to art director Eric Nicklaus.
"It's Fort Knox level security back there," he said.
While protecting customer data is a top concern, ePlate's format also works in ways that will protect banks' bottom lines. Mr. Mullen said many rewards programs associated with cards last more than three years and require such a huge marketing budget that banks rarely break even by the time the program ends.
With ePlate, both banks and companies with experience applications are paid a small amount per each transaction. He said banks could break even much sooner by capitalizing off promotions with movies and video games that wouldn't make sense with long-term rewards programs.
"With a Dynamics card, a bank could use a program for six months or for as long as 'The Hunger Games' or some other movie is hot, then switch to something else," he said.
Another benefit of the experience apps, said Mr. Mullen, is that many offer rewards or services in ways that are more directed toward individual users' tastes.
The Upper Deck experience app gives users virtual trading cards, but some users receive exclusive Upper Deck products, including signed cards. Other apps, such as South Side-based Evil Genius Design's "Black Friday-The Game," allow users to apply points toward certain actions in game play.
Evil Genius CEO and founder Tracy Brown said the platform gives users an opportunity to shop their way to success and to use points during times when they need an extra advantage in the game.
"In the morning, a customer might buy a coffee and say they want their experience points to go to a charity, but maybe when they go to lunch, they might want to earn points to play Evil Genius' "Black Friday" game and when they play at home they'll be a little better off," she said.
Mr. Mullen thinks this idea of completing tasks by using experience apps, particularly those that allow a donation to Amnesty International or provide the final chapter of an exclusive Warren Adler novel, will be what ultimately makes the card a favorite with consumers.
"People will go out at 2 a.m. to buy something from 7-Eleven because they want to get to the next level in a game," he said. "Instant gratification is one of the Holy Grails of what we're doing."
Deborah M. Todd: email@example.com or 412-263-1652.