EMV technology provider TAS Group has launched its card management software in the U.S., making an initial deal to integrate with Green Dot's reloadable prepaid card network.
TAS Group introduced the Card 3.0 platform in October in Europe, with plans to bring it to the U.S. payments industry this year as an EMV-ready option. The platform allows for various controls on spending on a prepaid or debit card, much like cards designed for teens and seniors.
The new pact is "an example of how easily Card 3.0 integrates into third parties such as Green Dot," says Ennio Ponzetto, U.S. manager for TAS Group. "The ability to declare we are compatible with the largest reload network in the U.S. is something that has a value to it, and that's why we are glad we did it."
While TAS continues to have a vision for Card 3.0 to manage credit and debit issuing, in addition to acquiring and linking to payment networks, the Milan, Italy-based company was able to "distill a prepaid container out of it" that it will use with Green Dot and others, Ponzetto says.
Green Dot did not respond to requests for further details.
"Green Dot is a big win for these guys and it will be interesting to see how banks approach their prepaid EMV programs," says Scott Strumello of New York- and London-based Auriemma Consulting Group. "An off-the-shelf plug-and-play option to do prepaid EMV is a pretty attractive option."
TAS Group could find a lot of prospective clients after the market works through some regulatory issues, Strumello says. TAS could pitch its technology as a cost-cutting measure for EMV card adoption, he adds. The U.S. is in the process of migrating to EMV-chip cards to improve security over the magnetic-stripe cards commonly used throughout the country today.
However, the competition in the U.S. prepaid market will automatically create a difficult minefield for TAS Group to navigate, and the mainstream credit and debit markets won't be much easier, says Brian Riley, senior research director and analyst with Boston-based CEB TowerGroup.
"Some of the features that TAS offers are innovative, but some of the controls have been available through something like Visa Buxx cards for years," Riley says.
There is room for TAS to enter the field, but the company "will certainly have to manage their pricing," Riley says. "It's a very competitive market."
In Europe, TAS went directly to banks to pitch the new platform because European banks operate as the issuer, processor and program manager. But in the fragmented market of the U.S., TAS adapted its sales strategy to first target card program managers, Ponzetto says.
"Program managers are between a rock and a hard place because they have dependencies on processors, but have the desire to be innovative," Ponzetto adds. "Their innovation is stifled because any innovation represents costs to them."
Eventually, TAS plans to also tout the Card 3.0 platform to processors and issuing banks that operate as program managers.
TAS calls Card 3.0 an "account-based system" that virtualizes the program form factor for cards, mobile wallets and online payments. The technology offers modules for acquiring, issuing, fraud management, card management, payment gateways and direct links.
As such, TAS says it offers program managers a full complement of EMV services that can reduce cost and get smart cards to market faster.
Card 3.0 also allows program managers to develop up to 40 different types of prepaid card products and value-added services or loyalty programs for targeted audiences. In addition, managers can create closed-loop products for specific marketplaces or cards that travelers can use only in specific countries.
Even though Card 3.0 is not a card system, per se, it can help companies migrate to EMV because the smart-card technology is built into all components of data preparation and card issuing, Ponzetto says. "When the program manager is ready for EMV, he can activate it as needed."