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#Payment Technology

Cardtech: from plastic to fantastic

New Technology
6 Mins.

When is a payment card not simply a payment card? When it includes a host of other technologies. While EMV® contact and contactless payment applications remain at the heart of today’s payment card, the newest generation feature a range of innovations that make them indispensable.

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With innovations in miniaturization, bank cards of the future will incorporate previously unthinkable technologies

We’ve been using chip‐based payment cards for many years. They were developed to meet the consumer need to pay securely, safely and conveniently. In fact, many millennials will barely remember life before chip and PIN or contactless.

One of the biggest recent developments is the addition of biometric sensors to payment cards. “This method of two‐factor authentication is secure, compliant and convenient,” says Mikko Kähkönen, Head of Smart Cards Portfolio, G+D.

G+D has a number of different approaches to combining biometrics with payment devices, including the pilot by French bank Crédit Agricole. Another advance on the security front is the move towards tokenization, which enables banks to turn an account number into a token that prevents fraudsters from identifying it.

Dynamic CVV technology is also a game changer for secure online payments. This replaces the static CVV (three‐digit card value) with an electronic display screen that regularly generates a new CVV number.

There are plenty of opportunities to incorporate previously unthinkable technologies into the bank cards of the future, thanks to the miniaturization of technology and components.

Environmentally friendly payment cards

The card industry is also committed to sustainability, with an increasing number of payment cards made from wood and corn starch in a concerted effort to move away from plastics. One of the biggest advances in this area is Mastercard’s Greener Payments Partnership, set up by Mastercard, G+D, Gemalto, and IDEMIA to establish best practices and reduce first‐use PVC plastic in payment card manufacturing.

This is a significant step forward when you consider that roughly 6 billion plastic payment cards are made each year, according to the Nilson Report. Although this is less than 0.015% of the total volume of plastic manufactured each year, using alternative materials makes a considerable difference.

Designer payment cards

Savvy consumers want their image and status to be reflected in every aspect of their life. In China, G+D has joined forces with a number of banks to sell innovative card bodies online. The design options aren’t limited to a simple picture card with the consumer’s own image. They can also select physical card elements and finishing touches, delivered via 3D printing.

G+D’s new partnership with HIT means customers can be offered a portfolio of metal payment cards that not only provide a seamless user experience but also have the looks to match.

Global trends for payment card technology

The physical payment card is just one part of a long process in the payments chain, which is why an increasing number of companies such as G+D are also offering bolt‐on services.

“At G+D we’re noticing some significant differences and trends in different regions’ adoption of some of the latest card technologies,” says Kähkönen. “For example, in the US, we’re seeing a drive towards premium offerings, such as metal and a push towards dual interface integration.

“In India, dual interface technology is gaining momentum and the market is rolling out products with an integrated service area for adjacent use cases.

“In China, beyond the QR code, it’s all about innovation using augmented reality and gamification, and in the broader Asia-Pacific region, the focus is on digital, but mainly for innovation in what we could call #mefirst.”

What next for payment cards?

There is optimism about the future of card‐based payments, particularly given recent developments which demonstrate how the industry has managed to adapt and deploy new technologies, substrates, and services that address the needs of consumers in 2020 and beyond.

“A card is not only a card but the financial ID for customers to connect to their banking accounts“
Mikko Kähkönen
Head of Smart Cards Portfolio, G+D

“A card is not only a card but the financial ID and brand element for customers to connect to their banking accounts,” says Kähkönen. “Regardless of the form factor, a card is still at the heart of the transaction, whether it’s plastic, digital, or virtual.” With this connectivity, there is an opportunity for new revenue streams, such as added‐value offerings connected to the card.

The pace of development in the payment cards market has varied widely worldwide, with some regions being early adopters of EMV® and others much slower to embrace the technology. Likewise, the move towards innovations, such as biometrics and new substrates, varies from country to country.

“Consumer behavior is driving the way we pay,” says Kähkönen. “This means there is a need for the industry to put customers first and have processes that can easily adapt to change.”

Published: 17/05/2020

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