A new payment card-fulfillment program from Total System Services Inc. and the Serverside Group Ltd. enables issuers to order relatively low quantities of customized cards on demand, the companies announced April 28.
Dubbed TSYS Card Shop, the program eliminates the need for financial institutions to stock premanufactured cards, Rick St. John, TSYS group executive, output services division, tells PaymentsSource.
Issuers could order just one card or several thousand, St. John says. TSYS produces the cards only after Columbus, Ga.-based TSYS receives a valid card request, he says.
“Low-volume manufacturing can be very expensive, and other card-customization processes had limitations,” St. John says. TSYS Card Shop can help shorten the time it takes to produce the cards, he says.
Issuers also may benefit from activation rates for personalized cards that often are 50% higher than with nonpersonalized cards, according to Serverside, which is providing its image-management and card-design technology to the TSYS Card Shop.
Issuers using TSYS Card Shop could see card-production time cut to between seven and 10 days from eight to 12 weeks using traditional card-ordering methods, TSYS says, noting cards ordered through Card Shop also could be less expensive than traditional manufacturing methods.
“This may very well play with credit unions who looking to the credit card market to pick up new business, especially as large issuers expect 10% to 20% of their cardholders to either drop off or be dropped off,” says Ron Shevlin, an analyst at Aite Group LLC, a Boston-based consultancy. Credit unions and community banks are lower-volume issuers, he says.
Consumers, especially younger ones, also want personalized cards, Shevlin says. For example, a consumer may want a photo of her pet on the card.
“The research we’ve done shows a decent, measurable percentage of the market wants that kind of option,” Shevlin says. The ability to customize a credit or debit card may sway many consumers, especially if they assume other factors, such as rates and fees, are equal, he notes.
“The ability to offer card customization and deliver it in a relatively low-cost way is a pretty good value proposition,” Shevlin says.
Issuers placing an order for 5,000 cards using traditional card-ordering methods might pay $1 per card. But the issuer’s cost increases to $2.50 per card when ordering only 2,000 cards, TSYS says. The company did not have an example of how Card Shop orders might compare.
“We are looking to fulfill on demand to reduce risk of inventory sitting unused on shelves and to lower the cost of low volume cards,” St. John says.
Issuers log on to a secure TSYS Card Shop website to order cards. They can customize cards on both sides with images from the site’s library or with their own images. Some card elements, such as the card brand logos, signature panels and holograms, are fixed, St. John says.
The Serverside Group is based in the United Kingdom.