Researchers develop a ’smart’ payment card that can easily be programmed to restrict spending

Researchers at the University of Pennsylvania have one-upped “smart” credit cards with embedded microchips: They’ve developed a technique that lets ordinary card users program in their own spending parameters.

Penn computer scientist Carl A. Gunter presented the work at the recent European Conference on Object-Oriented Programming in Darmstadt, Germany. The technology could let employers better manage spending on corporate cards or permit parents to get teenage children emergency credit cards usable only at locations like car repair shops, hotels or pay phones.

“Banks and other card issuers have long been able to set general parameters, such as credit limits,” said Gunter, professor of computer and information science at Penn, “but most have little interest in setting finer limits because the process is cumbersome and expensive to manage. We’d like to open up these kinds of additional programming capabilities to ordinary people who’d like to take responsibility for restricting use of a card in some specific way. Users would decide what limits are needed.”

Programmable credit cards could let cardholders limit expenditures, for instance, to $100 a day or to spending only on certain days or at certain establishments, Gunter said. The programmable card’s added layer of security could also help cut fraudulent online use of credit cards, which has grown into a significant problem for consumers and industry. The same technology could be used in cell phones that use a smart card, Gunter said, to provide owners with ways to regulate the use of the phone by others.

The programmable card developed by Gunter and his colleagues unites an array of existing technologies, including the microchips first built into credit cards more than 30 years ago. An on-card verification system prevents unauthorized users from tampering with limits programmed in by the card’s rightful owner. A commercial card-reader already on the market plugs into a computer dock, letting users link card and computer to create personalized restrictions using interfaces created by Gunter’s group.

Gunter’s work with programmable credit cards is the latest development in the movement toward open application programming interfaces, which allow users to tinker with the miniature computers embedded in devices from cars to cell phones to personal digital assistants. For example, many cell phones now have open APIs that let users import different ring tones.

“Open APIs are generally a plus for consumers,” Gunter said, “because they build in flexibility and allow for a richer array of uses.”

Gunter is joined in this research, funded by the National Science Foundation and Army Research Office, by Rajeev Alur, Penn professor of computer and information science, and Alwyn Goodloe, Michael McDougall, Jason Simas and Watee Arjsamat, all of whom are Penn students or staff.

Penn is seeking corporate partners and investors to commercialize this technology. Additional information is available by contacting Jennifer Choy in Penn’s Center for Technology Transfer at 215-898-9273.