Microchipping your money
(JournalGazette)– In a nondescript manufacturing plant on a quiet San Fernando cul-de-sac, a khaki-green machine the size of two pool tables end to end sucks in bright pink ribbon and spits out one of the hottest fashions in theme parks. Here, in the northern stretches of suburban Los Angeles, the private company that began producing plastic hospital wristbands out of a Burbank garage more than 50 years ago has become the nation’s top producer of a new microchip-enhanced wristband for amusement parks, concerts, resorts and gyms.
By: Hugo Martin
The wristbands use the same technology as electronic toll booths, security key cards and the newest U.S. passports. But at Precision Dynamics Corp., this sophisticated electronic know-how has found its niche at theme parks, where the high-tech wristbands act as high-security admission passes, cashless debit cards, hotel room keys and a form of identification to reunite lost children with parents.
In the past year alone, Precision Dynamics’ wristbands came online at Great Wolf Resorts’ newest water park in Concord, N.C., at the Schlitterbahn Water Park in Galveston, Texas, and at Water World, one of the nation’s largest water parks, near Denver. In total, more than 50 theme parks strap the wristbands on incoming guests.
Company leaders envision a future when they can expand the technology for use for border security and hospital identification, among other uses.
“All sorts of things can be done with this technology,” said Walter Mosher Jr. a company founder and member of the board of directors.
Precision Dynamics began in 1956 when a friend who worked in hospital supplies suggested that Mosher, a University of California, Los Angeles engineering student, design a better wristband to identify patients at hospitals. At the time, hospitals made wristbands from plastic tubes, using separate tools to cut and fasten the bands on patients. For infants, hospital workers strung together lettered beads that spelled the babies’ names.
At the machine shop at Burbank High School, Mosher and two partners devised a one-piece, plastic wristband that required no tools to fasten. The business that started with only $2,000 in startup money has expanded to 680 employees, a handful of trademark patents and offices in Brussels, Belgium; Japan; Italy; Mexico and Brazil.
In 2006, Mosher sued Precision Dynamics in a dispute over the election of board members. But the dispute was settled out of court last year with a deal that keeps Mosher as a shareholder and member of the board of directors.
The idea of using radio frequency identification, known as RFID, technology in wristbands came to Mosher about 10 years ago when he learned that microchips were being implanted in dogs and cats to identify them in shelters and veterinary clinics. A short time later, company Vice President Robin Barber moved ahead with the idea after meeting with managers from Great Wolf Resorts, who wanted to let guests buy food and drinks at the water parks without carrying a wallet or cash.
The result was a patented wristband affixed with a tiny antenna and a microchip, only slightly bigger than a postage stamp. Each microchip is programmed with a unique 16-character code. A separate device known as a “reader” emits a low-power radio wave that powers up the chip to collect the information and upload it into a computer. Thus the wristband acts as a key to access a computerized debit account or unlock an electronic hotel room or clothes locker.
The microchip wristbands represent about $3 million in annual sales for Precision Dynamics, representing only a fraction of the company’s more than $100 million in annual sales, according to company officials.
At theme parks, parents use a special kiosk to upload money that their children can spend. The microchips are coded so that the wristbands can be used only during a specific day. After a hotel or theme park guest checks out, the wristbands become obsolete.
Because cashless spending is more convenient, industry reports suggest that guests who use the wristbands spend as much as 25 percent more.
“Our guests appreciate the convenience of it all,” said Jennifer Beranek, a spokeswoman for Great Wolf Resorts, which uses Precision Dynamics wristbands at seven of its 12 water parks.
But price remains a barrier for expanding the technology. Wristbands that use bar-code technology sell for as little as 14 cents each while the RFID wristbands sell for about $1.
An RFID reader sells for about $450 each, roughly twice the cost of a bar-code reader.