A host of new
technologies are being proposed and evaluated for cards. This article is the
first of a two-part series that addresses the disruptive events looming large
on the transaction card horizon. Part one addresses the disruptive events with
their possible effects on today’s manufacturing processes and on the card’s
role in future digital transactions. In the next issue of Card Manufacturing,
part two will deal with issues of card quality and text procedures in light of
these new technologies.
Part 1
Taking a
census of the cards in my wallet gives me a small sample of some of today’s
card technology as well as some insight into new cards being considered going
forward. They consist of:
• 2
embossed, magnetic stripe financial cards
• 1 embossed, magnetic stripe, contactless
financial card
• 1 embossed
magnetic stripe, chip, contactless financial card
• 1 DOD
printed, magnetic stripe financial card
• 1 D2T2
printed, magnetic stripe ATM card with photo
• 1 litho
printed, barcode prepaid card (closed loop)
• 1 thermal
printed, magnetic stripe membership card
Manufacturing
these cards profitably has caused companies to focus on minimizing scrap and WIP
(work-in-process) inventory while eliminating any manufacturing errors. The
manufacturing equipment and processes have been upgraded to guarantee quality
cards without manual inspection while at the same time optimizing manufacturing
plant capacity and throughput. This has been done by the continuous improvement
of a manufacturing process that was developed some 30 plus years ago.
But even in
this small sample of cards can be seen some new technology that will require
changes to the “standard card manufacturing process.” While some of these cards
have new card technology, it has not yet been required for a financial
transaction, except in some very narrow applications in some countries. ICMA’s
involvement in card standards brings us in contact with the international
community where we see new initiatives that could require future disruptive
changes to the “standard process. “ These changes fall into three categories:
card materials, electronic technology in/on cards, and the impact of the
internet on cards and transactions.
The growth
in the use of metal in cards has been dramatic. This includes full metal cards
using several different materials and metal/plastic composite cards, including
layers of metal foils. Also, polycarbonate cards have been gaining ground
especially in driver license/ID applications. Recently, polycarbonate cards
that can be laser engraved to produce color images have been introduced,
increasing laser engraving options that could previously produce only black and
white images.
The second
category of disruptive change is being driven by the major initiatives being
considered to include devices on cards. Biometric fingerprint sensors,
displays, keypads, full-face touch screens, microphones, buttons and batteries
are all being considered. Biometrics as a separate technology is being worked
on in three ISO/IEC Standards committees and in three ISO/IEC SC 17 working
groups as well. This is a major investment in energy that will produce results
for future card applications.
The third category
of disruptive change comes from the impact the internet will have on cards and
in all manner of transactions. The effort seems to be at least somewhat driven
by “what is possible” rather than on “what is needed.” Mobile wallets are the
subject of many news articles and the competition to develop the “best” electronic
wallet is astonishing. Initial implementations have been superseded with newer
solutions as limited trials try to clarify the optimal mix of value and
security. One of the newer features announced for some of the electronic
wallets is that financial transactions can be enabled using a mobile device
without the need for a secure element in the device. Called Host Card Emulation (HCE), it allows
could-enabled financial transactions without involving the telecom provider or
secure key data from the bank issuer resident on the mobile device. This could
have a profound effect on the present mobile device market.
In the next
issues of Card Manufacturing, I will reflect on these disruptive events and
their effect on card manufacturing processes, quality and testing. These
effects could be major, not iterative. To understand what’s coming allows for
preparation in implementing operational changes that, in turn, provide competitive
advantage.
