Flat Cards Prove a Tough Sell as Fans of Embossing Persist
Time has run out for “knuckle-busters,” the clunky contraptions merchants needed for decades to accept card transactions, but their legacy—the raised characters embossed on payment cards—is proving difficult to stamp out.
Payment card networks phased out the requirement to emboss cards with account information several years ago, opening the door for flat payment cards that feature the same information—name, account number and expiration date—printed on the card in plain ink.
But even as a new generation of chip-enabled EMV cards floods the U.S., many issuers continue to emboss account information on new EMV credit, debit and prepaid cards, creating a puzzle for some card manufacturers.
“There’s not a single good reason for card data to be embossed on today’s payment cards,” said Deborah Baxley, a principal with New York-based Payments Transformation and Innovation Consulting, confirming that the majority of payment cards in her wallet, including EMV-enabled cards, are embossed.
One theory for why embossing persists is that issuers are reluctant to further rock the boat for consumers already coping with major changes in the look and feel of payment cards with the EMV migration, which is gaining momentum following the Oct. 1, 2015 liability shift for in-store counterfeit card fraud.
Render Dahiya, CEO of Arroweye Solutions, a Chicago-based card manufacturer that makes customized payment cards on demand for many smaller institutions and some larger banks, said issuers are often reluctant to introduce changes in products unless required.
“We can make flat or embossed cards, and we offer issuers the option of printing flat cards first, but many are still willing to pay extra for embossing, because they say some customers perceive embossed cards as the more traditional, secure approach,” Dahiya said.
Ironically, embossed cards could heighten card risk somewhat, Dahiya suggested. “The whole point of EMV and tokenization is to protect card data, and embossing it on cards creates a path for a paper trail,” he said. For example, a quick way for a criminal to skim the data off an embossed card is by making a paper impression of it with something as simple as a napkin, to use later for a fraudulent card-not-present transaction, he proposed.
Baxley says embossed cards pose little more risk than flat cards, noting a criminal could just as easily copy card data with a camera or a pen. But embossed cards offer no particular benefits, she added.
Another reason the embossing tradition sticks around could be the investment large card manufacturers and some issuers already made in massive, high-volume card-embossing machines.
“For bigger, older card manufacturers, it could actually be cheaper for them to use existing embossing technology than to print flat cards, so that may be another force driving the trend,” Dahiya said.
The old, manual card-processing units merchants previously relied on are rare sights these days, according to Douglas King, a payments risk expert in the Retail Payments Risk Forum at the Atlanta Federal Reserve Bank.
For decades before electronic payment terminals came along, raised plastic lettering on credit and debit cards was essential for merchants to complete a transaction by taking an imprint of a card—usually with a carbon paper slip, he noted.
The machines faded from use years ago, but merchants kept them on hand for transactions in the field, or as a backup during power outages. Mobile card readers delivered the final death knell, King suggested.
Issuers are gradually warming up to flat payment cards, according to Arroweye. “We’ve persuaded some issuers that flat cards are sleek and sturdy and they even take up slightly less room in the customer’s wallet,” Dahiya said. But he’s not sure how long it will take for embossing to die out.