Host Cyndy Brucato interviewed Todd Wilkinson about how Datacard Group is seizing global opportunities. The interview aired in the Twin Cities on Greater MSP Business on Sunday, May 4.

Traditional branch locations

Many traditional bank/credit union’s branches have already eliminated the 7-14 day wait time for their customers. Providing payment cards instantly and enabling immediate usage is increasingly recognized as a competitive advantage. Some banks and credit unions even offer instant-issue cards with custom background photos, helping them achieve instant gratification for their customers and “top of wallet” stature for their cards.

Retail stores

Financial institutions and their retail partners can instantly issue customized Visa® and MasterCard® co-branded credit cards from retail locations. Customers instantly receive a personalized, activated store credit card and can make a purchase during the same visit. Instant issuance software can be integrated with core applications, card management systems, and data preparation systems and services.  Retail stores can quickly set up individual kiosks or member service areas in store or franchise locations.

Electronic Benefits Transfer Programs (EBT) Programs

Electronic Benefit Transfer (EBT) programs allow government benefits departments to instantly issue reloadable open-loop prepaid cards.  Instantly issuing prepaid cards under municipally-managed benefit programs significantly reduces costs because it eliminates the need to produce and mail checks.

Payroll departments

Instant issuance can be used for programs that include prepaid payroll cards – or instantly issued check cashing card.  With instant issuance, prepaid cards can be issued to employees on site rather than giving out cash.

Self service kiosks

Instant issuance technology is great for self-service kiosks, including those that issue personalized gift cards.  A customer can simply walk up to the kiosk, input an image, enter the gift card amount, and within seconds receive a personalized gift card.

As NFC technology continues to be adopted throughout the world, financial institutions will have a great opportunity to capitalize on this trend by complementing their card programs without major infrastructure investments or changes to their existing processes – thus enabling continuity and consistency between issuing traditional plastic cards and new NFC-enabled applications for mobile payments, and adapting to the changing needs of today’s consumers and external competitive forces.

Datacard Group can speak to how organizations have a new and highly effective way to attract new customers and remain a leader in payments innovation. This presentation will discuss the benefits of having total payment issuance solutions for mobile NFC applications, virtual cards and plastic cards, as well as outlining how the technology works within banking infrastructures.

As the financial industry experiences major change — including the adjustments the recent announcements to accelerate EMV chip migration in the U.S. by 2015 – banks are being forced to re-evaluate their business strategies to minimize costs and increase efficiencies and innovations in their card operations.

Supplementing centralized card production with and EMV instant issuance program can be an initial step in the EMV migration path that all financial institutions can take to help meet long-term growth objectives and the requirements for 2015 EMV migration. In addition, it can help them enhance efficiencies in their card program by helping meet the needs of today’s consumers and drive up profitability and core deposits.

This presentation will look at the factors that are important for successful EMV implementation and outline how operations managers can integrate it into an instant issuance program. In addition, it will highlight the various EMV implementation options that are available, as well as discuss quality measures and ways to stay ahead of the innovation curve.

The movement may have gotten its start in an unlikely place – Sofia, Bulgaria, with the introduction of an SMS-based ticketing system for streamlining the local parking and public transportation system back in 2007 – a monumental advancement from the outdated “punching” system that predated it. What has followed is a complete revolution in payment options around mobile and NFC (Near Field Communication) and mobile commerce, that is offering a better experience for consumers and a more efficient, cost-effective means for streamlining the movement of the world’s rapidly swelling urban populations via subway, buses, taxis and other forms of public transport.

In the virtual era, Payment via NFC phones and contactless smart cards are propelling a lot of these burgeoning initiatives. While the outlook for widespread adoption of NFC is bright, estimates vary on when it will reach critical mass and be present in a majority of phones. Juniper Research placed the number at one in every five phones by 2014. Adding a microSD component to a given solution allows most non-NFC handsets (the major exception being iPhone, though products such as iCaisse bridge this gap) to be included in the fun. Marrying these emerging technologies with an instant issuance card strategy may represent the clearest path to success, while empowering consumers with instant and personalized offerings.

Several major cities have seen widespread adoption of this new model, which includes augmenting mobile payments with instant-issue smart cards. The wildly popular T-Money in Korea is ubiquitous and is incorporated into smartphone (SIM Cards), key chains, T-Money smartcards and other products. The payment solution works on not only buses and trains, but also at convenience stores and other businesses. London, also a pioneer in this space, is introducing new RFID applications for its mass transit system, which will build upon the popular Oyster card, introduced in 2003.

The transit authority in Chicago recently unveiled a plan to introduce an “open-loop” payment system for public transportation. Rather than issuing a single pass or pre-paid card, the “open-loop” system will allow users to pay with contactless bankcards (Visa PayWave and MasterCard PayPass) and eventually NFC phones. The Ventra Card, issued by Metabank, will also be available as a pre-paid and reloadable contactless card. Similar to the T-Money card in Korea, it will also be taken at other merchants and used as an ATM card. You can view a brief animated video on how the Ventra system will work beginning in 2013.

New applications of these emerging contactless and mobile payment solutions are presenting themselves each day. As the mobile wallet unfolds beyond the scope of payments to encompass mass transit, loyalty programs, membership credentials, building access, health services and more, the value proposition becomes clearer to consumers. Increased convenience and greater utility will drive broader adoption – and everyone has an opportunity to benefit.

Consumers become more loyal customers when the payment system is elegant and, ideally, packaged with loyalty programs and incentives. Financial institutions and public transit authorities can also leverage the wealth of data that comes with the (now trackable) consumer behavior. Is mobile commerce “driving” visible changes in your world – either as a consumer or industry professional? Tell us about it with a comment below.

Attributions:
Visa PayWave is a trademark of Visa International Service Association.
MasterCard PayPass is a trademark of MasterCard International Incorporated.

When we think mobile payments, the first thing that comes to mind is likely the ingenious Square mobile payments device, which converts any smartphone into a credit card reader. That device has ushered in a wave of new technologies across a wide spectrum of industries, all of which stand to change the way we think and act the next time we plan on paying with plastic.

We’ll offer a bit of a primer for what’s starting to shake out in the world of mobile payments, with a brief overview of 5 emerging trends:

1) NFC is finally here. Sort of.

NFC (or Near Field Communication) is currently present in an increasing amount of smartphones, including many of the top-selling phones on the Android platform (no sign of it in iPhone 5, but the rumor mill is already speculating on the next roll-out having it). All Windows phones are NFC capable. Blackberry 10 devices will soon be NFC-equipped, as well. Gartner currently has the equation set at 50% of all smart phones being NFC-enabled by 2015.

The benefits of the application are clear – customers simply wave their phone near an NFC-enabled POS to expedite a transaction. What is less clear is whether a standard will emerge that makes the process seamless and intuitive. Google Wallet arrived to much fanfare, but has struggled to gain acceptance (so far). MCX, or Merchant Customer Exchange, is a recently announced collaboration of some of the world’s largest retail players (Target, Best Buy, Wal-Mart, Sears and others) to develop a standard mobile payments platform and eventual app. It’s too soon, however, to know what that effort will yield.

Starbucks is the current poster-child, having successfully introduced a Square–based payment method into 7,000 of its stores. You can now order and pay for your latte in seconds (no instant app to speed up the frothing, however).  It is important to note that Starbucks utilized a barcode reader displayed by the app, rather than NFC, because it more easily integrated with their existing POS system. Meanwhile, McDonald’s is currently piloting a PayPal-based NFC mobile payments option at 30 locations in France.

One of the important side notes in this conversation is that, while NFC-enabled phones represent a fraction of the market currently, microSD cards can be introduced to the vast majority of phones in order to bridge that gap. In early 2012, Datacard partnered with DeviceFidelity’s In2Pay® suite of solutions which use microSD technology to transform smartphones into interactive contactless mobile payment devices.

2) Seamless Conversion

One of the obvious benefits of mobile payments is the ability to expedite a transaction: the more barriers that a merchant can remove from the point of purchase, the greater the conversion rate. Visa payWave, an NFC mobile payment system, proved successful at the 2012 London Olympics. Over 3,000 systems were installed at the park and around the city, speeding up payments for food, drinks and other goods.  The result? Contactless payment transactions doubled during the games, making the case for the speed, convenience and security NFC enables.

3) Moving to the “Cloud”

Security has been one of the x-factors (ahem) “clouding” the adoption of mobile payments as a legitimate solution by consumers, retailers and financial institutions. With a move to the cloud for credential storage, mobile wallets such as the Google Wallet have begun to offer some additional peace of mind, opening up the door for wider acceptance from financial institutions.

4) Loyalty Programs

Whether a digital “punch-card” or virtual “stamp,” the winners and losers of the mobile payments battlefield may be determined by who can not only enrich the POS process, but also use NFC and mobile payments as a means for building customer loyalty. Coupons, frequent customer rewards programs, push notifications and the like will be seamlessly integrated into the mobile payments solution offered by merchants who “get it.” Programs that combine mobile payments with loyalty cards and coupons have been documented by Mobile Commerce to drive an increase of over 25% in average ticket and frequency.

5) Multi-Tiered Integration.

With standards far from established, the likely winners will be those that cast a wide net and offer consumers and business/retail partners the most options. Google, via its partnership with Discover, has been rumored to be working on offering a more traditional plastic Google Wallet card as a companion to its virtual Google Wallet. This will allow consumers to use the card at locations where NFC is not accepted. On the retail side, using mobile payments in tandem with loyalty cards and coupons have netted the biggest uptick in both frequency and average ticket (both in excess of 20%).

Solutions that both embrace emerging technologies and understand consumer behavior stand the best chance of gaining immediate traction in the marketplace. A flexible, open strategy is essential – so is understanding the first-mover (or at least second- or third-mover) advantage. This represents a new channel in which to fight for share and “top of wallet” status. New channels don’t surface everyday (i.e. Internet), so it’s critical to take advantage. The expense of introducing the technology as a part of a given standard operating procedure is far less costly – in the long run – than playing catch-up or not offering it at all.

For banks, all of these strategies for mobile payments represent a completely new revenue stream and provide an instant differentiator for a financial brand. While the form factor has not been nailed down yet (combinations of NFC, cloud, bar codes, QR codes), your customer’s wallet will increasingly be turning virtual. That doesn’t mean, however, you can’t work to have your card inside.

So, back to the original question… what’s in your mobile wallet? Let us know below.

All of these personalized one-to-one marketing trends are driving smaller production runs, shorter pre-printed card stock lifecycles and shorter turnaround times.  However, these needs must still be balanced with tighter profit margins and tougher governmental regulation requirements when managing and evaluating operations.

Considering these trends and the competitive nature of the industry, there are steps you can take to help your card delivery program differentiate itself. Offering innovative products and services that protect your investments and optimize card programs is key. Consider:

1. On-Demand, Inline Color Printing

   This new technology helps balance the needs of marketing and operations teams and provides the flexibility to create more dynamic mailings. Turn blank white paper into highly personalized, full-color card carriers. These high-impact mailings aid brand differentiation and help create a message that resonates.

An entire warehouse can be dedicated to the storage of pre-printed carrier stock that must be ordered weeks in advance and stored and tracked.  If plans changes, or original volume needs are inaccurate, these documents remain on the shelves until they are finally thrown out, which of course directly affects the bottom line.

2. Larger Paper Support
   

   Traditional 8 ½ x 11” or A4 carrier sizes may no longer suffice to deliver obligatory legal disclosures and the key marketing content that generates new revenue and attracts customers.  New regulations have pushed the need to expand card carrier sizes to 8 ½ x 14”, 11 x 17” or A3 sizes.  With larger forms, issuers can now easily attach a card in addition to promotional and educational information, tear-offs and coupons to help drive revenue and decrease expenses – all on one form.

3. Inline Automation for Improved Efficiency

   Reduce turnaround time and production steps with inline automation.  Having an inline system that can both personalize the card and package it for mailing all in one step is ideal. It helps reduce customer turnaround time, minimize production steps, and increase operational efficiency and security by reducing the risk of human error and minimizing the handling of cards.

Instant card issuance technology is an innovative, next-generation tool that helps introduce new revenue-generating opportunities for your debit card program. Not only does it give you, the card issuer, the ability to retain and grow core deposits through improved service and convenience, instant issuance ultimately increases debit card sales, activation rates, usage, interchange revenue and top-of-wallet brand recognition. Flat debit cards (without raised lettering and numbers) are a great option for instant issuance because they allow you to start with blank white card stock — which helps reduce costs and risks associated with pre-printed cards.

Flat debit cards work just like traditional embossed cards and are just as secure.  You can  instantly issue multiple cards and designs at the branch level that are fully personalized and compliant with applicable standards. You can add any background image to the front and/or back of a card, or even offer your customers the option to add their own personalized photos or graphics.

Most banks and credit unions are looking for a competitive advantage. Delivering highly customized, flat debit cards to your customers on-demand gives them  instant gratification, helping ensure your institution’s card will be top-of-wallet.

“Instant-issue is a real time-saver for our customers,” said Brad Nolan, Head of Design for Branch Innovation.  “Customers can enter their local branch, select a debit card of their choice, select a PIN, and begin using their card immediately.  And if a customer’s card is lost or damaged, they can get a new one right there.”

Instant-issue technology from Datacard Group (Photo: Business Wire)

Chase will install instant-issue technology in 800 additional branches across the United States during 2013.  The bank also plans to offer the same convenience for customers with Chase-branded credit cards and the Chase Liquid reloadable card.

The new instant-issue debit cards are the latest step in Chase’s overall efforts to make banking simpler, easier and more convenient for customers through innovative products and services. Chase also:

• Became the first large bank to adopt a simple disclosure form for its checking accounts based on Pew Health Group’s recommendations;
• Reduced and eliminated several checking account fees;
• Launched @ChaseSupport, its first customer service Twitter handle; and
• Continues to pilot new branch technologies, including self-service banking kiosks that let customers handle many transactions quickly on their own.

Through its renewed efforts to exceed customer expectations, Chase has substantially improved its overall customer satisfaction – measured both internally and by independent groups – over the past year.

Chase worked closely with Datacard Group to develop and install the instant-issue technology featured in the branches.

About Chase

Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), a leading global financial services firm with assets of $2.3 trillion and operations in more than 60 countries. Chase serves more than 50 million consumers and small businesses through more than 5,500 bank branches, 18,500 ATMs, credit cards, mortgage offices, and online and mobile banking as well as through relationships with auto dealerships. More information about Chase is available at www.chase.com.

Photos:
Chase Bank in Downtown Seattle, Washington ©iStockphoto.com/carterdayne 
Instant-issue technology from Datacard Group ©Business Wire