Serverside Group Ltd.’s receipt this week of a European patent for its digital technology used to print customized payment cards on demand will protect its market but also may create competition as other companies develop and enhance similar technology, some observers say.
“The patent definitely protects Serverside’s specific niche but doesn’t mean the customization of cards will end,” Brian Riley, research director of bankcards at Needham, Mass.-based TowerGroup Inc., tells PaymentsSource. “It protects the technology but also spawns other innovations in the industry.”
United Kingdom-based Serverside designed its particular technology, called One Customer-One Card, to enable card issuers and companies to personalize and manufacture payment cards only when necessary, Tom Elgar, Serverside Group co-founder and chief technology officer, tells PaymentsSource.
In the past, financial institutions often printed cards preprinted in bulk. Printing cards on demand “takes the risk out of the equation for card issuers, as they no longer have to print cards in bulk and be left with huge inventories,” Elgar adds.
Serverside’s technology also enables companies to print payment cards with customized imagery, which Serverside believes increases the card value for issuers.
Cardholders create customized imagery, which may be a picture of a family member, pet or memorable event, Elgar explains. Increasingly, the imagery “is created by other groups such as small businesses, affinity groups and sports teams looking to create a stronger bond with customers,” he adds, noting the cards also may boost cardholder retention rates.
Moreover, customized cards help to “propagate usage while subtlety getting the banks name out there,” Riley says. But the main challenge is what will happen to this technology now that the industry is moving toward mobile payments, he adds.
Meantime, Serverside believes its technology can help card issuers still issuing plastic cards save money.
The company’s most recent case study features Birmingham, Ala.-based BBVA Compass Bank Inc., which was able to generate an additional $45 per card per year through increased transactions from a card-customization program, Elgar says.
Additionally, Total Systems Services Inc. has been using Serverside’s technology since April in its TSYS Card Shop to help eliminate the need for financial institutions to stock premanufactured cards (see story).
The cost of the technology “varies according to the type of card program and the specific nature and need of the issuer or personalization house,” Elgar says. Serverside declined to give a general cost estimate.
Serverside has similar patents for its technology in Europe, Australia, New Zealand and India.
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