While all attention now appears to be focused on the digital transformation of banks, it is essential to remember the decisive role that EMV cards continue to play in our payment system. Even in an era dominated by smartphones and 24/7 connectivity, cards continue to be the most popular form of payment by far. In addition, it is developments in the design of payment cards that have led to the most radical recent changes in the consumer landscape and, thanks to migration to contactless payments, allow faster and simpler transactions. And when it comes to innovation, the payment card still has plenty of tricks up its sleeve.
Over recent years, a whole range of promising solutions using payment cards have been introduced: with new designs and new options, the card appears to have been given a new lease of life, as witnessed by the recent launch of biometric cards. A revolutionary product that adds a whole new dimension to the contactless experience. Thanks to an increasingly comprehensive range of products, the payment card is now an essential and effective marketing tool for banks, allowing them to optimize their customer portfolios.
Confidence in cards remains unrivalled
According to IHS research released in 2017, of the 51.7 million people living in South Africa, at least 66.8% of them are in possession of bank cards that are active. The report also shows that the cards in circulation grows around 9% year on year.
Although the incredible success of contactless transactions has itself undoubtedly given payment cards a new lease of life, in the eyes of banks and users they continue to be a relatively functional product. However, their intrinsic values should not be underestimated. Firstly, EMV cards enjoy a remarkable degree of consumer confidence. Unlike a mobile phone or any other connected device, a payment card is issued by the bank itself. Secondly, the end user can see the security chip integrated on the card and be completely confident that their funds are protected in the event of loss or theft. At a time when the threats of fraud and cyberattacks continue to grow, these fundamental characteristics will only become more important.
Customers embrace innovation
If we examine attitudes toward payment cards more closely, recent studies show that consumers are in fact very open, and even enthusiastic, about potential innovation. In addition, this enthusiasm is not restricted solely to the older generation. The Y generation is just as attracted by the prospect of payment cards that are more modern, adaptable and practical. It is interesting to note that cards are still being adopted more quickly than mobile payment services.
The rise of sophisticated technology to counter potential fraud is helping to increase the adoption of EMV in countries like Kenya, Nigeria, Ghana, Egypt, and Namibia. Just recently Gemalto announced that it will be providing its PURE white-label payment solution to GhIPSS (Ghana Interbank Payments and Settlement Systems), a subsidiary of Ghana’s central bank that manages the country’s interbank payment processing system. Technology and consultancy will help speed up Ghana’s migration to the enhanced security of EMV transactions, and enable GhIPSS to offer its 41 member institutions comprehensive support for the introduction of domestic branded EMV cards.
A declaration of environmental credentials
Alternatives to conventional plastic cards offer interesting potential for attracting certain customers. For example, bio-sourced EMV payment cards allow banks to demonstrate their genuine commitment to environmental values. Produced using polylactic acid (PLA), a plastic substitute derived from corn, these biodegradable cards have the same properties in terms of durability and graphics as a plastic card.
Modernity by design
Another option is use of a card with a metal core. Thanks to a greater feeling of weight, tougher appearance and more contemporary design, the metal card has become this year’s must-have high-end product, capable of attracting the most demanding customers.
Adding value by adding functions
Multifunction cards offer banks another way of adding value. Everywhere around the world, card issuers are increasingly looking to combine EMV payments with other contactless services, such as transport, building access and even identity. While offering customers the convenience of an all-in-one solution, this approach opens the way to partnerships with other stakeholders, thus strengthening the key and privileged positioning of banks with their customers.
Connecting the physical and digital
Another option is offered by the DCV (Dynamic Code Verification) card, a product which also underlines how an EMV payment card can forge strong links with the digitization process. The DCV solution replaces the static three-figure security code traditionally used for online purchases with a one-time code displayed on the card. This product ensures not only greater security for online transactions but also eliminates the risk of card numbers being cloned in a face-to-face transaction.
Biometrics get on board
These connections between the physical and digital can be seen in the recent launch of the biometric payment card in Cyprus, featuring a fingerprint sensor. As the user brings the card to the contactless payment terminal, they simply place their finger on the sensor to authenticate the transaction, which can also be carried out in contact mode. As a result, there is no upper limit when using contactless payments.
This solution therefore combines the two most powerful strengths of the current consumer environment: biometrics and contactless transactions. The launch of the iPhone 5S in 2013 introduced the public to the concept of fingerprint recognition, and the speed with which it has been accepted and adopted is truly phenomenal. Real momentum therefore already exists for abandoning PIN codes and passwords in favor of biometrics. Not only are biometrics more practical for consumers tired of passwords, but they also allow irrefutable confirmation of the user’s identity. What’s more, this new type of card retains the option of switching back to use of a PIN code if necessary.
Completing and supporting the digitization process
While nothing can stop the evolution of the banking sector towards a future dominated by digitization, it does not, however, mean the end of the bank card. Thanks to the unique, tactile and personal connection offered by the card, the bank has a unique and effective marketing tool for strengthening the bond with its customers. Featuring innovative design, new functions and new uses with added value, the card has many assets to ensure that bank customers enjoy more personal and easier banking transactions. In-depth knowledge of customers and their needs are of course the keys to a differentiated and attractive bank card offering. Many banks around the world have already started this transition process by offering card products adapted to the needs and practices of their users. A strategy that could prove extremely profitable in an increasingly competitive world where winning and keeping customers is of ever greater priority.
By Yogesh Mathur – Vice President for Banking & Payment for Africa at Gemalto
