CARD PRODUCT PROLIFERATION DEMANDS NEW MATERIALS
By David Tushie – Magellan Consulting, Inc., ICMA Standards and Technical Representative
The recent ICMA Card Market Report from Al Vrancart, founder emeritus and industry advisor for ICMA, detailed the very healthy 2018 global market for cards. After examining the report, it is obvious that polyvinyl chloride (PVC) is the card material of choice for most of the applications regardless of the geographic area of manufacture.
PVC is sufficiently robust, is compatible with the already-installed manufacturing equipment and processes and is available at an acceptable price point such that it is very hard to replace with other materials that have a higher cost or require changes in the equipment, materials and processes of the card manufacturing plant. However, this doesn’t mean that changing or upgrading our products is out of the question! But as I have often noted, plastic card products are evolutionary in their nature, with long product cycles and requiring good marketing reasons for making a change.
Metal and metal composite cards are a good example of a valid marketing initiative driving plant and process investments required to produce a functionally-acceptable product. As this market grew, costs further reduced, growing the annual volume. Today, we see millions of metal cards replacing traditional PVC cards in the financial market. The PVC cards were replaced, not because they did not process transactions or had a high failure rate, but rather they were not sufficiently unique for an important segment of the financial card market. What new set of circumstances is on the horizon to enable a similar unique marketing action? And what new materials will be employed to meet the requirements of that card product?
In the late 1980s, France started to convert its payphones from accepting coins to accepting semiconductor chip cards and in doing so eventually killed the global market for traditional coin-operated payphones and the need for coin collectors. The evolutionary process of converting the pay telephone application included more lucrative and broader online card-based financial chip card transactions. Card-operated point-of-sale (POS) terminals needed to become more commonplace in most merchant locations. Then, after working through varied regional implementation issues, the near full rollout of contact cards and POS terminals over a 10-year timeframe identified several shortcomings, notably perceived longer transaction times. While delivering on the promised increased transaction security, a growing need for shorter transaction times evolved by using contactless card technology. Manufacturing contact chip cards requires the milling of a cavity in the standard card and inserting a micromodule into the cavity. The contactless card required an antenna to be incorporated on an inlay component inserted between the top and bottom layers of the card body. A chip is attached to the antenna on the inlay to communicate with the contactless terminal and provide services to the cardholder. Transaction times are greatly reduced. While this may address the transaction time issue, what do we do about the millions of contact chip terminals that cannot handle contactless cards? One answer is to manufacture dual-interface (DI) cards. These DI cards provide transaction security and flexibility but at a price, an additional complication to the card manufacturing process and potentially the involvement of new materials and components to achieve it.
Looking forward, what is on the horizon? High-durability materials for “rollover” transit ticketing applications are a possibility for contactless cards that serve as longer-term passes and need not be replaced after each use. These cards need to be durable and able to handle daily physical usage. Rollover cards automatically renew their value when it falls below a preset limit. As a result, the use of disposable tickets is declining and the easy purchase of transit fares is increasing.
In other markets, technology cards that include electronic components are slowly becoming a reality. The ISO/IEC 18328 Standard, initially published just over a year ago, is being updated to improve the interaction of the card with the smartphone device. Essentially, this work is directed at enabling them to work together securely, while using multiple applications. Executing these applications will require cards that contain displays, batteries or other power sources, switches and semiconductor elements. The construction must be robust and impervious to cracking and delamination. They will be more expensive to produce, and they must “prove their worth” by providing real value. A recent demonstration of an interactive card application as a standalone secure hot spot for encrypted internet communications was very intriguing.
As we look to manufacture these cards, we will have to look at stronger card materials and adhesives to eliminate card failures. To be economically viable, we will need automated manufacturing processes and large sheet sizes. If new printing technologies are needed, surface preparation of the card sheets may be required. Everything discussed here can be done if there is a sufficient marketing mandate to drive the engines of innovation.
About the Author: ICMA Standards and Technical Representative David Tushie has had a long and continuing career in the card industry working for international companies such as Datacard, UbiQ and NBS Technologies. He has master’s degrees in engineering and business, holds U.S. and international patents in measurement and card issuance systems and has had several years of involvement with the ANSI, INCITS and ISO standards process. ICMA is represented at six ISO and ANSI standards meetings through his standards role within the association.