Addressing Changing Trends and Needs in the Financial and Retail

Market

Presented by Alyssa Arredondo

May 3, 2011

Agenda• Industry Trends

– Security– Innovation

• Cards• Mobile

• Addressing Market Needs– Print On Demand

• Photo Cards• Card Carriers• Instant Issuance

– Security• Secure Issuance Anywhere

• Security– PCI-DSS

– Standard for transaction processing

– Now security framework for card issuance

– EMV standards – Make face to face payment more

secure, – Online transactions source of

growing fraud concerns

– Visa and MasterCard driving adoption of 3D secure

– Security framework for online transactions

– Increasing requirements for user authentication driving issuance of security tokens

– One time password devices

Industry Trends – Increasing Security Requirements

Card

• Growth in adoption of unembossed cards• Display cards with built-in touch screens and

buttons• Electronic Stripe cards• Instant Issuance Kiosks

Mobile

• Multiple applications convergence for smart phones

• Magstripe readers fitted to smart phones• NFC technology for face to face payments• SMS technology for remote (online) payments• More than 140 mobile payments pilot projects

around the world. (nfctimes.com)• Many ‘’bridging technologies’’ given NFC

phones are not yet massively available

Industry Trends – Innovation

• Intuit GoPayment and Mophie Marketplace™ complete credit card solution • Securely process credit card payments on iPhone 3G and 3GS• Square allows anyone to accept payment cards using their mobile device.

Industry Trends – Innovation

Are They Ready for Mobile Payments?

Addressing Financial and Retail Market Needs

Addressing the Needs: Balancing Act

Retailer/Bank Customer

Flexibility

Convenience

Speed

Security

Profitability

Scalability

Competitive Edge

Customer Satisfaction

Addressing the Balancing Act – Issuance of Payment DeviceFlexibility Profitability Convenience Scalability Speed Security Competitive 

Edge

• Varying issuance models address multiple needs of retailers and banks

Addressing the Balancing Act

Unique, One-of-a-Kind

Instantly or Centrally Issued

Photo Cards

Start with Blank Paper

No Pre-Printed Stock

Card Carriers

New Cards

Emergency Card Replacements

Instant Issuance

Flexibility Profitability Convenience Scalability Speed Security Competitive Edge

Print on Demand: Three types

Addressing the Balancing Act – Photo Cards

Personalized Photo Cards• Credit /Debit/Gift • Event Prepaid

Numerous Websites• User-friendly

Flexibility Profitability Convenience Scalability Speed Customer Satisfaction

Competitive Edge

• 3% better account retention• Higher customer loyalty and engagement that leads to much higher cross-sales• $45 incremental yearly revenue per card from personalization based on additional

usage and interchange revenue

Key Performance Indicators Total Portfolio 

Personalized Check Cards

% Change

Activation Rate  57.8% 88.7% 54%

# Transactions  per active 15.8 20.1 27%

Source:  BBVA Compass Bank extended case study results using Serverside Technology for debit card program

Flexibility Profitability Convenience Scalability Speed Customer Satisfaction

Competitive Edge

Addressing the Balancing Act – Photo Cards

Addressing the Balancing Act – Cards and Card Carriers

Flexibility• Adapt quicker to legislative and/or market changes• No need to destroy outdated card stock• Print most current Terms and Conditions• Increase number of designs offered

Competitive Edge• Establish brand differentiation• Satisfy consumer demand• Deepen cardholder loyalty• Attract new customers• Greener solution

• Less plastic in landfills/waste in raw materials

Profitability• Reduce preprinted stock

• Blank white card stock• Reduces vault space

• Increase card usage

Flexibility Profitability Convenience Scalability Speed Security Competitive Edge

Central Issuance

Addressing the Balancing Act – Instant Issuance

Sources: Bangor Bank over a 45 day period and Carrefour Banque  présentation  Club CSA du 19 Novembre, 2010 

• Instantly issued cards had 48% more transactions than centrally issued cards

Sources: Bangor Bank over a 45 day period

Flexibility Profitability Convenience Scalability Speed Security Competitive Edge

Branch Issuance

Addressing the Balancing Act – Instant Issuance

Activation rates remain15 percentage points higher among instantly issued cards, after 30 days (90% vs. 75%)

Sources: Carrefour Banque  présentation  Club CSA du 19 Novembre, 2010 

Flexibility Profitability Convenience Scalability Speed Security Competitive Edge

Kiosk Issuance

Addressing the Balancing Act – Security

• “Dynamic” Cards– More expensive on a CPC basis– Display cards– Reduce Online fraud

• EMV – Reduces POS fraud– EMV cards hard to copy

• Laser-engraved cards– Suitable for metallic cards printing

• Titanium, rubidium for VIP cards• Many plastic types (PVC, PET-G, PC)

Flexibility Profitability Convenience Scalability Speed Security Competitive Edge

Addressing the Balancing Act – Security

• Datacard provides infrastructure to support varying issuance models

Flexibility Profitability Convenience Scalability Speed Security Competitive Edge

Thank You

www.datacard.com