The EMV migration remains a hot topic throughout the payments ecosystem, raising question about customer adoption and production fulfillment. PYMNTS sat down with Blake Barker, Group Executive of Output Services at TSYS, to discuss the company’s new Chip Card on Demand manufacturing service and how it aims to ease transition concerns by boosting up production in front of the looming migration deadline.
You recently announced a new card manufacturing service designed to provide issuers with more control of the chip card migration. How exactly does Chip Card on Demand work? And with less than four months to go, how efficient can it be?
BB: Back in 2010 we announced the opening of our on-demand card manufacturing facility within our card personalization bureau, but the most recent news was around our on-demand milling and embedding operation. Over the last five years we have had our sights on the EMV migration for the U.S. and how to help prepare our current target audience, focusing specifically on the on-demand manufacturing process as well as the chip on-demand process. Normally the demand comes from small to medium-sized issuers requesting customized cards or startups; our process gives them a "pay-by-the-drink" type option.
Now with the milling and embedding, we are extending that capability past the magnetic stripe, allowing the process of embedding the chip and preparing for the personalization to take place entirely within the TSYS Output Services on-demand Card Shop.
It sounds like issuers are offered more flexibility to not only control how they process and distribute but also how they personalize the cards as well. Is that true?
BB: The EMV world we live in today is full of complexities, but our process certainly helps to minimize some of these by offering a truly off-the-shelf product that can immediately be moved to issuers. Chip selection is completed on the issuer's behalf, and the scripts are already written for the particular chip sets, providing an ease of migration to EMV. Whether they prefer to start small or with a big bang, we are prepared to help with that.
You mention Chip Card on Demand is particularly well-suited to smaller and medium-sized issuers. Is that where you are finding the demand for the service?
BB: Yes, that’s what we have seen so far. The service is implemented in two different ways, the first being through our on-demand manufacturing where we can extend the process to also embedding chips. The other option is to bring a card out of our vault that an issuer may have purchased through another supplier then embedding a chip and enabling the card for personalization.
What aspects of the chip card production process have you improved, and how were you able to identify the right tweaks to make?
BB: The design of our facility is laid out very methodically to suit our manufacturing process, allowing the flexibility to expand for the milling and embedding operation and reconfigure for an optimal workflow. It required a lot of forethought; however, a lot has changed over the last five years, so we were able to better position ourselves within the last year for the plans to launch Chip Card on Demand.
One of our unique offerings is the Fast Cards solution. In this scenario, if an issuer requests a card by 3 p.m. through the Fast Cards service, the card will be printed, laminated, punched, hot-stamped, chip-embedded, personalized, fulfilled, packaged for an express carrier and shipped out by 11 p.m. on that same day. The delivery to the customer is scheduled to take place by 10:30 a.m. the following morning. I don't believe there is anyone in the market able to do that today.
From an overall perspective of card personalization, we buy millions of plastics a year to put in our vault that we do not manufacture in our shop. We are trying to fit that small niche, so we have chip-enabled cards in our vault today that we can ship overnight if needed. But the uniqueness about our process is that we are actually manufacturing the card and embedding the chip. It is not something we are pulling off of a shelf.
Can you estimate the volume of chip cards you will most likely help your clients bring to market by October? How many more chip cards will this new process produce?
BB: Optimistically, we will probably deliver 400,000 cards between now and October through this process, but from a normal personalization process, it will be millions. I'm hopeful that the process will provide a lot of customers with a lot of opportunities to get cards into the market by the shift. But I'll caveat that with saying this is a new product, and we are still in the process of onboarding clients. There is a pipeline of clients moving to the service, and then they must leverage it on their side for their customers. So it will take time.
What is TSYS card services focusing on next?
BB: I heard a statistic recently that said 40 percent of the world is on a dual-interface card and that is certainly top of mind for us right now as the next evolution of EMV in terms of consumer acceptance. We believe there is going to be consumer demand for a tap option for EMV versus a drop-in-the-slot option and a PIN. Dual interface is coming. We certainly don't know how fast that will be, but I think in 2016 it's going to be a focus for us, as well as looking at how to build out the capability to manufacture a dual-interface card in this card shop and with the chip on-demand process. We started dabbling in the dual-interface space on a small scale with some of the issuers we service today, so we expect to see that grow going forward as well. Also on the horizon as something we will probably all be hearing more about soon is instant issuance.