by Jennifer Kohlhepp, Managing Editor, ICMA

Payment cards, which are more dynamic than ever, are already well suited to card-present (CP) transactions. With the world becoming increasingly e-commerce-based, cards need to adapt without giving up their ease of use, convenience and familiarity. Extending proven Europay, Mastercard and Visa (EMV) security to card-not-present (CNP) transactions is the obvious road forward.

ICMA member Ellipse achieves this with its new-generation EMV module that incorporates a dynamic card verification value/card verification code (CVV/CVC). This makes using a payment card for digital payments as easy and secure as for an in-person transaction, according to Cyril Lalo, CEO at Ellipse.

Card manufacturers must garner clients' and financial institutions’ trust in the digital economy. Cardholders trust cards that work without friction. A card that functions without false declines, extra steps on the cardholders’ behalf for authorization and further actions on all types of transactions, including digital, will become the customers’ next top-of-wallet favorite.

There are key payment card statistics gleaned from tracking average spend, user experience and top-wallet drivers’ and cardholders’ willingness to pay for payment card security.The product for which customers will pay the most is the one that will give them peace of mind.Data shows that cardholders are willing to pay for, use and even switch banks for cards that work securely and frictionlessly.

According to a recent survey from FIS, which was presented at FIS Emerald 2022:

• 55% of customers would switch issuers for an Ellipse Verification Code (EVC) card
• 68% of debit cardholders would pay $1/month
• 60% would pay $2/month for an EVC card

First came EMV payment. Then came contactless payment. EVC is the next natural evolution of EMV security that addresses e-commerce transactions, fraud and false declines—all of which are primary concerns for financial institutions and their clients.

Prioritize client experience and trust by offering products that:

• Work with minimal friction
• Leverage existing rails and infrastructure
• Do not create additional roadblocks to effective and safe payment for all

Adapt with Products that Thrive

Card manufacturers must create and offer products that mitigate the type of fraud that’s most dangerous to its clients: CNP fraud. In fact, the future of the payment industry’s revenue model hinges on CNP transactions. On the processor side, a fee per CNP transaction can be added in order to secure these transactions and decrease false declines. In this way, payment security becomes the product driving the revenue model.

More and more customers are willing to pay for increased security and decreased friction. They’re also willing to pay for a certain “wow” factor. Metal cards and fintechs are proving to be popular, especially with younger generations.

Subscription-based card programs, or premium yearly fees for elite card programs, have become more prevalent in recent years because cardholders are willing to pay for what’s important to them. It’s a brave new world of card revenue models, and manufacturers must adapt with products that thrive in this world.

Generate Strong Anticipation from Cardholders

Card manufacturers can leverage cutting-edge, much-buzzed-about innovations. They include dynamic CVV and eco-friendly cards to generate strong anticipation from cardholders and, consequently, financial institutions.

EVC-equipped cards eliminate card re-issuance, due to stolen card information, therefore maximizing the lifetime of the card. This makes EVC-equipped cards eco-friendly, which reduces financial institutions’ carbon footprint.

Leverage Existing Processes and Equipment

Card manufacturers can leverage existing processes and equipment to produce a more desirable payment card that meets new standards.New innovations that are built on existing rails are key.

As Ellipse works to produce a frictionless product based on EMV, it’s also focusing on leveraging processes that already exist and adapting them to ensure that card manufacturers can reuse their existing equipment and processes. The EVC solution was designed to fit seamlessly into the supply chain, from card manufacturing to personalization.

Prepare for the Future of Payment Cards  

Ellipse believes in card-based payment. Payment cards are a great equalizer in terms of customer experience and financial inclusion. The key to adoption for any new card technology is seamlessness: the card must be simple and fast to integrate and deploy, and easy to use with a seamless cardholder experience.

The future of payment cards will address CNP fraud and false declines, offer new revenue opportunities to all stakeholders, provide cardholders more confidence in e-commerce transactions, promote customer acquisition and increase issuers’ market share with the “wow” effects of cutting-edge technology and style.