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The Making Of A Smart Card
Ramon Padiernos
 The banking and finance industry is a fast-paced, challenging and highly-competitive market place. During the past few years, the industry has recognised the benefits of integrating smart cards into the front-line to help in the fight against fraud, to help retain customers through personalized loyalty schemes and to enhance the customer banking experience of the future through multi-applications and m-Commerce.
Various marketing forecasts cite the annual growth rate for financial smart cards worldwide to be over 45% for the next five years. For example, Visa, which has the largest segment of financial cards in the world, has announced plans for a worldwide migration to smart card-based products. (Active pilots and roll-outs are already happening). Moreover, MasterCard also aims to convert all credit cards to smart cards by 2005.
In order to meet the demands of the financial services sector, smart cards must be of high production quality and offer advanced tailored solutions. This article aims to take the reader from the manufacturing and production line to the solutions and R&D developments in order to provide a clear picture of the processes that result in high quality smart cards suitable for the demands of the banking and finance industry.
The manufacturing process ...
The manufacturing process is the starting point; good manufacturing equates to high quality and reputable products. It is not the most glamorous aspect of the business but a fundamental one; not just in output of products but quality control, cost effectiveness and to ensure a high quality yield.
Since November 2001, all the Gemplus staff in Singapore are now housed under one roof, be they from manufacturing, R&D, management, or sales and marketing. What this means in terms of value-added is the strength in communications between each department and the fact that it offers a total solution.
The customer may want a "one-stop-shop" from sales support to R&D, to manufacturing, to programme management. The fact that none of the systems and processes are outsourced means that from project fruition to completion, the customer is guaranteed a high-level of customer service and greater control over the project.
The manufacturing division is divided into two sections; "module manufacturing" and "card manufacturing".
Module manufacturing is the stage in which the microchips are encoded and this must take place in state-of-the-art "clean rooms". At the Gemplus Singapore site, the new 2,000sqm clean room manufacturing facility produces around 31 million microchips a month for Gemplus' global markets.
Clean room, Class 10K is necessary for the processing of the microchips before the encapsulation. This is to avoid any foreign materials or particles contaminating the chips which may cause electrical failures. Moreover, the critical dimension of the electrical circuit within the microchip is around 0.5 micron to 1.0 micron, any particle that is bigger than that dimension will definitely create failures.
Quality is assured...
At the end of the electronic coding process, each card will go through electrical testing to ensure that the chips are functional. Whatever the quantity may be (small or large), a financial service provider can be assured that each card will be tested at two points during the manufacturing process. The card will also be tested in "card manufacturing" once the chip has gone through the embedding process.
To put it simply, a manufacturing process should ensure that only the highest quality cards end up in the customer's hands. There is no place for "dud" cards on the market. The reputation of a customer can be at stake if their end-users are provided with unreliable cards. In the case of a bank card issuer, the product and how it performs is a significant factor in influencing how the organisation as a whole is perceived.
In Singapore, Gemplus has a standard of a one to two percent higher yield than the industry. High yield means high quality products; the benefits of these are two-fold :
One - Top quality products that are tested and functional upon delivery with a one year warranty.
Two - High quality yield means that card cost is kept to a minimum.
From the "module manufacturing", (chip encoding and testing), they are then transferred to the "card manufacturing" division for personalisation and embedding.
At this point, it is interesting to provide an example of how R&D and the card manufacturing process are able to meet with specific customer requirements with the announcement of "GemLucence".
GemLucence is a plastic card technology that allows visible light to pass through the card while creating sufficient transmission density within the Infrared spectrum. This allows the card to be recognised by ATM and personalization equipment by utilising infrared sensors to detect the physical presence of the card.
Translucent technology creates a whole new look in plastic card bodies, and GemLucence translucent cards are available in a wide range of TechnoTone background colours, appropriate for ATM use and our newly-developed CitronTones, appropriate for retail and loyalty applications.
However, the most exciting opportunity that translucent technology offers is the opportunity to utilise three-dimensional graphics in card design. Gemplus has developed specialised graphic treatments and printing techniques to maximise the visual appeal of the translucent card body.
The techniques range from a truly three-dimensional design from both sides of the card to a stark contrast between opacity and translucency to a simple shadow creating depth behind an object. (Gemplus has applied for patent protection on our specialized design and printing techniques).
This new technology typically addresses the need for higher security and cutting-edge design. From a mere commodity, cards are becoming "smart devices" and users take pride in owning them. In countries where the usage is more advanced, smart cards have become a "cool" device and a symbol of modernity along with mobile phones and handheld devices.
 GemLucence cards are created under R&D and the design, printing, personalization and embedding are part of the "card manufacturing" process. An important benefit at this point (in the manufacturing process) is the fact that Gemplus has a "huge-ready capacity". What this means to banking customers is that, if the customer orders 25,000 cards, for example, and then decides to order another 10,000, through over-capacity, Gemplus has the facility to extend and accommodate increased request.
The Personalization Process
Personalization will take place at this stage of production according to the customer's specifications. The vast majority of cards follow the same production line. However, if a customer requires additional services: urgent processing, prestige packaging, or simply wants to outsource distribution to card users, all these needs can be met.
At this point in the production process, Gemplus' software solutions can be downloaded onto the cards. Once in the market, smart card applications can also be downloaded and modified remotely, without the need for card re-issuance, improving operation efficiency and more importantly, enhancing the end-user's experience.
Financial Standards
When working with an industry like the financial services sector, universally recognised standards have to be applied. "EMV Prime" comprises a suite of solutions catered towards financial institutions in various geographies and segments. It aims to provide a simple and cost-effective path for achieving EMV compliance.
Solutions include best-practice implementation methodology, optimisation tools, pre-integrated hardware and software, smart cards and card-issuing services.
A benefiting case study for bankers...
MasterCard wanted to improve the loyalty of its 20-35 year-old clients, and it began by segmenting the consumer profile (golf players, online internet buyers, men and women who belong to the same age group?) The cards solution that was designed enable issuers to reach specific groups with targetted offers.
mc2 card developed by Gemplus smart technology (gemshare-club card) has a single chip with enough memory to support debit/credit, internet ID and loyalty. For this innovative project, Gemplus also provided new software for web marketing.
This automates repetitive functions enabling users to navigate and buy on the internet in a much easier, faster and more customised way. This project took place in Latin America.
Conclusion
It is an exciting time for the smart card industry and there is more pressure than ever to deliver high quality cards and solutions. This article sets out to show that the manufacturing process, the process that works behind the scenes, has a beneficial impact on the banking customer.
A simple statement that summarizes this is, manufacturing equates to quality, and good quality products can enhance a customer's business.
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