Are payment cards here to stay?

The recovery of the economy, the increase in financial literacy and the consequent increase in the banked population, as well as the variety of ATM services provided in Portugal, has increased the number of bank cards in recent years.

Despite this being a decade of changes in the banking competitive arena, namely with the bankruptcy of banks such as BPN and BPP, the BES fraud scandals and acquisitions such as the incorporation by Banco Santander of BANIF and Banco Popular, there was still room for innovation. Experiences such as online account opening, MBWay (alternative payment method), the CGD DABOX app (taking advantage of PSD2), or even exploiting credit from a more humane perspective like PUZZLE did, are just a few we can name.

Portugal has innovation in its DNA and the adoption of new ways of looking at banking has been notorious. However, even though new payment methods are emerging and adhering, their penetration does not yet seem to replace the use of plastic card. According to the studies to which we have access, the forecast for the coming years is still for growth both in the number of cards in circulation and the value payed with cards. And if growth exists in total, it is expected to be twice significant in prepaid cards, namely closed-loop prepaid cards.

As we have heard repeatedly at several recent industry conferences (Banca do Futuro, Portugal Digital Summit and MoneyConf: Web Summit), the focus should not be on technology, but on customers and solving their problems or difficulties. If the new forms of payment will solve these problems, then they will find their space and their success, if they just appear claiming the use of the latest technology, then they will find user disappointment and poor adherence. While debit, credit, prepaid or any other card is the best solution for many consumers, it will remain a concern for us to provide the best solutions for those who want to use it.

The trend of metal cards

What do the studies say?

According to the ICMA Card Marketing Report study, the 2018 market increased the demand and sale of cards.

A reading of the report points out to the fact that PVC is the raw material of choice for most card uses, regardless of their geographical location.

It is generally known that PVC cards are widely implemented in our everyday lives. This card has an acceptable cost and all production and customisation processes are adapted to this material. For these reasons it is difficult to switch to other raw materials that will, of course, entail higher costs and adapting customisation equipment.

Nevertheless, the materials used in cards have evolved in order to achieve the differentiation sought by customers. In fact, from a marketing point of view, the process of changing from PVC cards to metal cards, for example, can be justified for specific products, markets or segments.

Are all metal cards the same?

No, in fact there are different ways of incorporating metal into the cards, and four types are generally identified:

Full Metal Card

They are made solely of metal and are available in various precious metals such as platinum and gold, as well as other metals such as stainless steel, nickel, and silver.

Hybrid Metal

The front plate of the card is in metal but the back plate is in PVC, and the core of the card is also in PVC

Metal Plate

These consist of two metal plates (one on the front and one on the back) in which the core of the card is in PVC, which is why the card is lighter.

Encapsulated Metal

These cards are pre-laminated with PVC sheets, but are much heavier due to their metal core.

Do metal cards work the same way as PVC cards?

PROS:

  • They can work in a similar manner to the already known plastic card;
  • They are more durable than plastic cards, which does not mean they are indestructible;
  • Premium feel associated with metal.

CONS:

  • Some cards are incompatible with contactless operations, but some manufacturers are developing combinations of metal alloys that allow the contactless system to operate in a normal way;
  • Although the robustness of the cards makes them ideal for travel, they can be detected by metal detectors, such as those found at airports. Although, at airports, you are asked to remove everything from your pockets, if this card is forgotten when passing through the metal detector it may activate it;
  • Its rigidity may pose a problem with regard to ATM equipment, automatic machines, etc.

Furthermore, during the development process, the particularities associated with this material must be taken into account:

  • Its laser-based customisation process generates a groove-type engraving, giving the card a tactile sensation of depth.
  •  Creative and design teams must pay particular attention, since Pantone colours are not the same on metal as compared to their use on PVC.

But then, if they do have some limitations and require care, why produce metal cards?

A market survey carried out by CompoSecure with over 6,000 consumers from the markets of Brazil, Hong Kong, Japan, Singapore, the United States and the UK, revealed that 59% (the majority) of the study respondents prefer metal or hybrid cards over plastic cards. This number was always above 50% in all surveyed markets, reaching 82% in Brazil.

The study highlights the fact that the metal card can be an important factor for the final customer in deciding between one or another financial institution, combined with high loyalty and reward programmes.

Conclusion

For our customers, the metal card can generate higher client volumes and may mean greater visibility for their brand. In fact, the status resulting from a metal card is highly valued by users, so they should not be discarded from the bank cards design portfolio. However, there are options for metal cards that give some margin for greater efficiency in the installed processes, and which should be options to consider to avoid greater concerns or functionality limitations.

At Contisystems, as always, we are committed to finding the best card for every situation. Count on us to provide you with the available options, advantages, and limitations, and to work jointly on the layout of your card.

How do the Portuguese pay?

The Payment Systems Report for the year 2018 was recently published by the Bank of Portugal. This report, which reflects the evolution of payment methods in Portugal, gives us a very current view of the Portuguese payment behaviours and of what trends have been observed. Analysing the recent past gives us important tips for the future, and we believe for our customers as well. We took the opportunity to share a brief summary.

In 2018, with growth in terms of economic activity, retail payments in Portugal continued to grow. In 2018, 2.7 billion retail payment operations were processed in the amount of 491.5 billion euros, representing an increase of 7.6% in number of transactions and 7.3% compared to 2017.

Besides payments in cash, which still represent most payments, cards are the most commonly used means of payment by the Portuguese (87% of payments not made in banknotes and coins). This is followed by direct debit, credit transfers and cheques.

Portugal is among the European Union countries with the highest number of bank cards per inhabitant; at the end of 2018 there were more than 30 million cards in Portugal (of which more than 21 million were debit cards).

The Portuguese mainly make withdrawals and purchases with their card. Considering a trend of migration from withdrawals (1% increase in number of transactions) to card payments (a 12% increase in number of transactions), there was an increase of 8.7% in the number of Automatic Payment Terminals (APTs) to 349 thousand and a 2.3% decrease in the number of ATMs.

Although 38% of the cards and 72% of the terminals are already available for contactless payments, only 4% of in-person purchases were made using this technology. Of the total purchases made with cards only 4% were made online.

Credit transfers represent more than half of the amount transacted in Portugal and were the instrument with the highest growth. This growth trend was common to all electronic payment methods.

Although the number of payments by cheque decreased by 12% in 2018, representing a 6.3% decrease in value, an average of 120,000 payments per day are still made by Cheque. The amount paid by cheque totalled 89.7 billion euros in 2018.

It is also worth noting that since 2018, the Portuguese have a new solution to make their payments, and the immediate transfers, completed in seconds already represent, on average, 7,170 payments per day since its launch in September 2018. See the full study of Bank of Portugal here.

Cards: contactless or non-contactless, that is the question

Surely you have noticed those people who are in front of you, or even by your side, at the cashier of a clothing store, for example, and who make payments with credit or debit cards, without even needing to mark the classic GREEN + CODE + GREEN. Right?

Well, it’s not magic or technology from another planet, these people are simply using contactless technology. And note that there are more and more people are using this system.

In Portugal, for example, the number of transactions doubled in relation to 2017, but it is still well below the figures recorded for the rest of Europe.

According to Mastercard in Portugal, this number shows that “there is still a long way to go, as contactless transactions in Portugal represent less than 3% of total transactions, whereas in other European countries it already represents between 30 and 50% of the total amount”.

If we look at the general numbers, contactless is mostly used in the retail trade, accounting for 85.8% of the total number of transactions and 74.6% of the value, according to the 2017 Payment Systems Report.

Let’s talk about cards

At Contisystems we are more than used to looking at these subjects and we like to think that we know a few things about cards.

That is exactly why we decided to try to give a direct answer the question that is the title of this article: Contactless or Non-Contactless, that is the question.

To do this, we decided to create a list where we show you some of the advantages, which are many, and the disadvantages, because these also exist, of this payment system.

However, before we start trying to find the answers that you are looking for, it is important to mention the Banco de Portugal definition for contactless technology here:

Contactless cards are payment cards with proximity reading technology. These cards allow you to make payments without having to enter the PIN: for that purpose, simply place the card close (normally, less than 4 centimeters away) to an automatic payment terminal (APT) fit for the purpose of receiving contactless payments.”

Pros of contactless technology

But let us return to the advantages of this payment method:

Greater security.

This is an undeniable advantage.
Even Banco de Portugal itself tells us that “the contactless system offers greater security to the cardholder and greater protection against fraud attempts, as it makes it easier for you to make payments without the card leaving your hand, or having the need to enter your personal code in public. ”

Therefore, making payments by using contactless technology allows us to maintain greater control of the process and prevents our card from being, for example, cloned by copying the magnetic stripe or the chip.

To make a payment with contactless technology, it is always necessary for the merchant to first enter the value in the APT. The customer will always have to confirm the value of the transaction before using the card. Once the value has been confirmed, the card must be placed close to the APT, typically within 4 centimeters of the machine, until the transaction is confirmed. The terminal does not perform any additional transactions until the current transaction is complete.

Payment limits.

If you do not know, we can also tell you that card issuers have defined a set of control elements to ensure the security of these cards and these entail measures such as: existence of a maximum amount per contactless transaction and imposition of a limit of consecutive contactless payments.

Possibility to disable the contactless system whenever you want.

The card with contactless system retains its functionality of traditional use with PIN. To disable contactless, you only need to contact the entity that issued your card (usually your bank) and ask to deactivate the system. Upon deactivating, the card will work like any other non-contactless.

More convenience.

With this type of payment you do not have to worry about one more code to memorize, or having to hide the code from the person next to you, the person behind you and the person waiting for your payment.

Possibility of turning your smartphone into a card.

There are debit cards, credit cards and prepaid cards that already have contactless technology. This option also allows you to make payments through your mobile phone or smartwatch.

Visa, for example, already allows any NFC app for Android to enable the smartphone to emulate a smart card by using Host Card Emulation (HCE).
Users can wave their smartphone in front of a secure reader to pay for their purchases.

Cards and APTs with contactless technology must be adequately identified with the following symbol:

simbolo contactless

Cons of contactless technology

Despite all of these advantages, DECO has left some recommendations for the users of this type of technology, alerting to some vulnerabilities of this type of system.

According to this organization, which is responsible for consumer protection, “some free and simple to download mobile apps, enable the reading of contactless card data.”.

Therefore, if you are a public transport user at rush hour and, to avoid transmitting data from your card – although close proximity is required for someone with a mobile phone with one of these apps installed to get your card data – Deco advises you to carry the card in an aluminum wallet designed for cards, so that you can isolate and protect it.

In addition to this Deco alert and despite the fact that contactless technology is a reality that is perfectly inserted in the physical payments made in Portugal, it still has some limitations, which we will now present:

Low value transactions.

The maximum amount allowed for a transaction of this kind is generally fixed at 20 euros. Let us agree that it is not a particularly exciting amount, but we believe that soon these values ​​will be revised to allow for a greater use of contactless technology; i.e. each contactless payment cannot exceed the maximum amount allowed. This maximum value is defined by the entity that issued the card.

Limit of consecutive payments.

In addition, another limitation is the existence of a limit of consecutive payments that can be made without entering the PIN, which is usually 60 euros. Once this limit is exceeded, the customer can only re-make contactless payments after performing an operation in a payment terminal or in an automated teller machine with the PIN code. This limit is also defined by the entity that issued the card;

Deactivation of the system must be done by the Bank.

For you to deactivate the contactless function in your card you must make that request to the card issuer, which in this case is your Bank.

Usage rules are not universal.

For this reason, Banco de Portugal recommends that if you travel abroad and intend to do contactless transactions, you should try to read up on the applicable rules in the country where you are traveling to.

Here at Contisystems, we are avid admirers of this technology, due to the privacy it enables, the fact that it makes your transactions safer and more comfortable and because it makes your life easier.

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Raise your arm if you have never been scared by change

Change, be it geographical, in terms of leadership or a simple software version change , can generate anxiety that is not always well received. With all the challenges that it imposes, the routine is something certain and that offers us the peace of mind of knowing what we are going for, and this happens both personally as well as professionally.

The level of security that each change offers us, the impact it has and the ease of implementation, can make it closer to or further from reality.

At the professional level change has the aggravating factor of responsibility, because we are making a decision that does not only affect us, but the whole organisation , and the choice for change will always be more controversial for challenging the installed routine. But the risk of not changing, of accommodation, is also high so it is essential to look for changes with impact, that bring us safety and that do not aggravate the work routine of the organisation .

Let’s take an example from Contisystems to show you what can be an easy and safe change after evaluating the impacts.

A smart card, because it contains personal data, and even financial data in the case of bank cards, is a critical instrument in the relationship with your customer. Ensuring that it is produced, personalised and delivered in complete safe way is of course a major concern and therefore changing supplier at this level may, due to its impact, require a more careful evaluation. However, this change can offer you security if you realize that there are good references and that the process of change is simple and easy.

Replacing the card personalisers for Portuguese issuers is an easy and safe process. In fact, they only must make changes to the contents of the logical file that they send to the data generating entity. This change is made in two fields, in the field related to the personalizing entity that becomes “Contisystems” and in the field that refers to the sending entity of the personalisation file, which is also filled in with another description.

Before sending the logical file to the data generating entity, the issuers must generate, with the same entity, a Transport Key for the new personaliser . This new key will serve to encrypt the sensitive data in the card personalisation file.

Upon receipt of the card personalisation file and the Transport Key and after all the above interactions are guaranteed, Contisystems can then customize the certification test cards that will be delivered to the issuer along with a personalization report.

After the BIN certification process in the respective Brand (VISA or MASTERCARD), during which you will have full support, Contisystems is certified for that specific personalization.

If a new Credit or Debit Card is a challenge for you, let us help you and show you that changing card and personalization provider, or having more than one, is simple and brings you many advantages.

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Cards of all colors and shapes

Although immediately associated with payments and banking, cards are nowadays used by different types of companies for payment, identification, or even for loyalty purposes.

Any wallet is now packed with several cards, not to mention those who stay at home since they no longer prove to be useful. However, the card remains an extremely important physical element for materializing the association with a brand or a company.

In this context, the care and consideration when choosing a card that will materialize a brand or a company must be reinforced. In addition to reflecting brand values and being its extension to the physical world, it must differentiate itself from the competition in order to have literal “share of wallet” and be effectively used.

Cards are manufactured in a wide variety of materials and styles, so it is possible to choose the ideal card for payment, identification, loyalty, access or even offers. The range of materials, shapes, styles, colors and / or finishes is so high that the choice has to be done according to the intended end result and impact that it is intended to reach the end user.

Here are some ideas of variables than can be considered while choosing a card:

Standard Identification Cards

Standard ID cards are made of durable and flexible PVC plastic. These cards are used for all applications and are available in various sizes and colors.

BioPVC Cards

BioPVC cards are an environmentally friendly option made from completely biodegradable material. This type of material offers the same photo quality, durability and flexibility of a standard PVC card with less impact to the environment.

Recycled PVC Cards

Recycled PVC cards are another green alternative to traditional PVC cards as they are made from recycled plastic. The recycled PVC material is comparable to the standard PVC in durability, flexibility and print quality.

Re-writable ID cards

Re-writable ID cards are made of a heat-sensitive material that can be printed, erased and reprinted up to 500 times. These cards require an ID card printer with a rewritable print mode. Because rewritable cards can be printed only in monochrome or black blue, they are ideal for business cards designs with plain text or graphics.

PVC Cards with sticker on the back

These are PVC cards with a strong Mylar adhesive. Usually, they are attached to concatenated proximity cards or other technology cards that cannot go through an ID card printer.

PVC / Poly Composite Cards

PVC / Poly compound cards are recommended for cards that will be laminated. Its special materials can withstand the highest heat and resist warpage during the lamination process.

UV ink cards

In the process of manufacturing these types of cards a UV paint is applied in order to react with the black light.

Transparency cards

These cards are produced in a way that allows to see through them, thus allowing a combination with branding elements and a visual image with a big impact.

PVC Cards with Metallic Foil

Cards with produced with sheet metal that gives them a high quality metallic look.

Textured Cards

These are cards that, in its the manufacturing process is applied texture to reinforce the senses, namely visual image and the sensitivity to the touch.

Perfume Cards

Cards in which microcapsules with a lasting essence are included. It allows to emphasize the attention to the card and allows a greater connection to the brand since there are numerous essences that can be used.

Cards with RFID, Chip and Magnetic Stripe Technology

The products range and combinations of a PVC card with RFID, Chip and Magnetic Stripe technology is very extensive, each technology can be inserted according to the intended purpose of use.

In addition to these options and combinations of technologies, materials, scents, colors and textures, it is also possible to apply cutouts, color the edges or apply 3D effects to the card. Contisystems not only provides the personalization service but also gives all the support to its customers in defining the ideal card for each scenario.

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New Features in Card Personalisation

More than just a new piece of equipment, the Datacard MX2100 presents a whole new host of possibilities and benefits for our Customers.

With Datacard MX2100 Contisystems will present its customers with new incredibly powerful ways to differentiate their brands as well as their cards. It will be, for example, possible to introduce personalised messages on a ratio of 1:1 in the card carriers, thereby using this space to encourage the activation of the card, add promotional coupons or create cross-sales of other products and services, all with the possibility of introduction of variable data.

This strong investment allows Contisystems to gain scale capacity by producing up to 1200 cards per hour as well as further enhance its service quality.

The automated and innovative inline quality assurance, with the automatic verification of the physical and electronic elements of the card, allows for a greater reduction of errors and also contributes to a higher speed.

The acquisition of this equipment reflects the Contisystems mission to be “the fastest and most reliable end-to-end provider of secure personalised customer communication products and services.”

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