The ongoing adoption of the EMV chip-card standard in the U.S. means credit and debit card issuers will have to consider new factors to offer the cards at their branches.
With the EMV standard, "there is a lot more security and [interaction] between issuer and the card platform," says Glen Fossella, chief operating officer of CTS North America, a division of the CTS Group, an Italian company that manufactures scanners, ID cards and embossing technology.
Though it is possible to offer EMV cards on the spot, it involves more work behind the scenes than magnetic-stripe cards require, Fossella says. "With mag stripes, instant issuance is essentially a print job. It's a unidirectional process," he says.
EMV cards must adhere to encryption rules that govern how to protect data on the chip and the user ID.
"EMV is a bidirectional process where there's communicating back and forth," Fossella says. "It's a more complex job to make sure you are [installing] the proper security on the card."
CTS North America just introduced card-issuing tech, including the CPS120, a base unit that issues flat or embossed cards for magnetic stripe or EMV coding.
CTS North America's hosted or deployed technology can track the status of a new card. "You can determine where the card was routed, or where it can be rerouted if there's a problem with a branch," Fossella says.
CTS did not name the users of its instant issuance tech for EMV. Fossella says the company is in talks with banks.
The company plans to take advantage of a series of card-network imposed deadlines for EMV migration in the U.S. Some of these deadlines are as early as this month.
CTS North America, which also sells bank branch automation technology, competes with Datacard and Fiserv.
Datacard augments existing magnetic stripe data with EMV-specific data loaded onto the chip. Datacard has made instant-issue EMV cards in Canada, giving it some experience to bring the U.S. market.
Fiserv, which launched new instant issuance technology in the fall of 2012, also offers EMV capabilities for these cards.
Datacard and Fiserv did not make executives available for interviews by deadline.
Instant card issuance hasn't taken off in a big way, says Zil Bareisis, a senior analyst for Celent
But with EMV, "the reasons to adopt instant issuance get stronger. You don't have to mail the PIN, which can get lost," he says. "And the consumer can customize the card right there in the branch."
Issuers also have to decide on outsourcing the data preparation and key management for EMV cards, which has ramifications for both instantly issued and mailed cards, Bareisis says. It's more expensive to handle the data preparation in house, particularly if the card issuance is decentralized for instant issuance, but there are benefits.
"There are good arguments to keep the data in house and have control," Bareisis says. "Whether the card is issued from a central location or at the branch, the question is who does preparation. Is it a third party or the bank itself?"