Total System Services Inc. is working with a London card producer to offer a fulfillment program for issuers that order small quantities of customized payment cards.
The Columbus, Ga., processer and Serverside Group Ltd. said the TSYS Card Shop would eliminate the need for banks to keep stocks of premanufactured payment cards.
Issuers could order just one credit or debit card or several thousand, said Rick St. John, the group executive for TSYS' output services division.
"Low-volume manufacturing can be very expensive, and other card-customization processes had limitations," St. John said, and the TSYS Card Shop will be able to reduce the time needed to produce and deliver cards.
TSYS makes the cards only after receiving valid card requests, he said.
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. The two companies announced the deal on Wednesday.
Issuers using the 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 said, and cards ordered through the Card Shop would often be less expensive than those made with traditional manufacturing methods.
"This may play very well with credit unions who are 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," said Ron Shevlin, an analyst at the Boston market research company Aite Group LLC.
Credit unions and community banks typically have fewer customers than the major issuers and require smaller quantities of cards, Shevlin said.
There is growing interest in personalized cards, especially from younger consumers, Shevlin said. For example, a cardholder might want a photo of their pet on the card.
"The research we've done shows a decent, measurable percentage of the market wants that kind of option," Shevlin said. The ability to customize a credit or debit card may sway many consumers, especially if they assume other factors, such as rates, rewards and fees, are equal.
"The ability to offer card customization and deliver it in a relatively low-cost way is a pretty good value proposition," he said.
Issuers placing an order for 5,000 cards using traditional card-ordering methods might pay $1 per card, and those costs often increase to $2.50 per card when ordering only 2,000 cards, TSYS said.
TSYS did not provide its own pricing. "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 said.
Issuers can order the cards online. The cards can be customized on both sides, though some elements of the designs are fixed, including the card brand logos, signature panels and holograms, he said.
Serverside operates card programs for more than 1,000 issuers in 23 countries.
Meanwhile, TSYS has agreed to offer credit and debit card programs to credit unions that use the debit network operated by Alaska Option Services Corp. of Anchorage.
The deal was announced on Thursday.