Credit Card Strips ‘Saved’ By Western Pennsylvania Firm
PITTSBURGH (AP) – Jeffrey Mullen labored in obscurity at his young local company for about three years. But within the last two months, he has sprung into the national spotlight.
He was featured on “Squawk Box,’’ the popular CNBC morning show for investors and traders on Oct. 28 and is likely to appear again, and he was also expected to be a guest on Fox.
“Being the hottest tech startup helped,’’ said Mullen, chief executive and founder of Dynamics Inc. in McCandless. “But the level of press on this is humbling.’’
Dynamics’ technology and three core products could radically reshape how credit and debit cards are used and secured. And they could do so without altering the 60 million or so magnetic stripe card readers used to process the 1 billion credit and debit cards in the United States.
“It’s like a PC on a card,’’ Mullen said of the technology he created. It crams 70,000 electronic components on a credit card using one-tenth of a cubic inch of space. “All that circuitry basically rewrites the card’s magnetic strip.’’
Dynamics’ primary technology can be used to render credit and debit cards fraudproof, he said.
In place of a card number, a credit or debit card equipped with Dynamics’ technology has five buttons for entering a code to activate the card and display its number. After a transaction, the card number display turns off and the magnetic stripe erases itself.
“So if the card is lost or stolen, no one else can use it because they don’t know how to turn it on,’’ said Mullen, 32. “It eradicates theft and fraud loss.’’
Another product can embed several credit and debit card accounts onto one piece of plastic. A third product enables cardholders to instruct their cards at point of sale to pay by using rewards or loyalty points.
The company’s so-called Redemption card so captivated Citibank that it agreed two weeks ago to use the technology in two of the giant bank’s rewards cards. Mullen said that other big banks, which he declined to name, are poised to announce similar agreements near the end of the year.
Dynamics started to get the financial world’s attention when it won both top honors _ the Demogod and People’s Choice awards _ at the Demo Conference in mid-September held by IDG Group and other technology companies. The semi-annual high-tech conference showcases smaller companies’ products.
Not some obscure confab for geeks, the Demo Conference culled 66 presenters from over 300 start-ups’ applications worldwide for a 6- minute demonstration. Previous award winners include TiVo and PalmPilot, which respectively changed televi- sion viewing and introduced the PDA (personal digital assistant) craze.
“His product could be the next big thing in an industry that hasn’t had a new product in years,’’ said Silverman.
Mullen started Dynamics in 2007 while pursuing a master’s degree from the Tepper School of Business at Carnegie Mellon University. He earned an undergraduate degree in electrical and computer engineering from CMU in 2001.
By the time he graduated in May 2009, Mullen had seven employees on a payroll he funded from savings during his years, 2002 to 2007, as a patent agent and then attorney in his native New York. He earned his law degree from New York Law School in 2005.
Dynamics quickly caught the eye of early-stage company funder Adams Capital Management Inc. The Sewickley firm led a group that bought $5.7 million of Dynamics’ preferred shares, a deal that closed in September 2009.
“I think this company can be truly impactful for this region over the next few years,’’ said Adams Capital general partner Joel Adams. “What they’ve done is to turn the plastic credit card into a consumer product. It’s a cool platform to build on.’’