Instant issuance solutions like CardWizard let campuses produce branded plastic

By Chris Corum, Executive Editor

If you have a bank-issued debit card in your wallet, chances are that it has a MasterCard or Visa logo on it. But if you have a campus card with a bank account attached, odds are it does not. More likely you will see ATM network logos like Pulse, Cirrus, or Maestro. A major reason for this is that students need the ID card the day they get to campus but you can’t just print a MasterCard or Visa card from your card office … or can you? A growing number of campuses are doing just that and it may well be the wave of the future.

One of the long-standing “truths” of the campus card market was that campus card programs require instant issuance but the card associations, specifically Visa and MasterCard, prevent instant issuance of their branded products in an effort to combat fraud. The association requirements dictated high security printing environments and strict blank plastic management processes that made it all but impossible to print cards on campus or even within a bank branch. Branded cards came from fortress-like printing facilities with clean rooms, man traps, and armed guards.

But something changed a few years back and that change is rippling through the campus card industry. The rules governing card issuance eased enabling branded cards to be produced under less stringent conditions.

Today, many bank branches are issuing debit cards to their new customers and replacing lost or stolen cards for existing cardholders on the spot …and some campus card programs with bank partnerships are along for the ride. Campuses in North Carolina, Wisconsin, Michigan and Colorado are paving the way, providing library and mealplan functions on the same piece of plastic as global branded debit card services.

A solution called CardWizard from Englewood, Colorado-based Digital Card Solutions has been a key player helping financial institutions and campuses make it happen. According to the company’s Vice President of Sales, Ron Zanotti, it can be done with very little disruption to the current student badging processes.

How does instant issuance typically work on campus?

“Our implementations follow the same process flow through badging,” he says. “The only difference is that when (the student) engages with the banking representative they get a different card selected in the system and it is routed to a different printer.”

That different printer is stocked with blank plastic cards with the Visa or MasterCard logos and embedded security elements.

The card is printed with the elements sent from the normal campus card production system. This can include elements such as digital photo, cardholder name, ID number, library number, etc. The magnetic stripe is also encoded with the same data as the normal (non-branded) campus card.

At this point, the card is really just a campus card printed on branded card stock. But from here, the process changes for the branded version. The card is transferred from the standard card printer and fed into the embossing unit.

It reads the data encoded in the magnetic stripe and uses the ID number to call for information from the bank’s card issuance system. From the bank system, the data elements required to make the card a compliant, readable branded debit card is obtained. The magnetic stripe is then rewritten with the new data – or a combination of the old and new data.

The cardholder name, account number, and expiration date are embossed on the card and it is ready to go.

The offset PIN, an encrypted version of the cardholder PIN, is written to the magnetic stripe during the final encoding process or in a subsequent process of customer self-selection.

Security remains a major focus

Mr. Zanotti stresses that the instant issuance rules still require extreme caution and strict control over blank card stock and system access. “Dual control procedure that are currently used for other cash like conditions” are required when dealing with card stock. Two people must count and sign for the stock when it is received and locked up, when it is moved from inventory to the printer, etc.

But this responsibility falls not with campus staff but with bank staff. “When we send it to the printer that has the Visa/MasterCard stock,” says Mr. Zanotti, “(that printer) is located in the bank branch.” Indeed all the processes associated with the branded card issuance and account setup are typically handled by bank personnel.

But while the personnel remain bank employees, the facility where production occurs may not always be the on-campus branch. U.S. Bank will begin issuing a Visa card at the University of Wisconsin Eau Claire campus this spring but the bank does not have an on-campus branch.

According to a U.S. Bank representative, with prior instant issuance campus programs, the student is instantly issued the card, but still has to go to the branch to have the card activated before being able to use it. “With the U.S. Bank program, the account and card are instantly issued and activated at the card office and in the U.S. Bank card system so the customer can walk out of the card office and go right to the ATM or a merchant and begin using it.”

Campus cards using instant issuance

While only a handful of campuses have made the leap to instant issuance to date, Mr. Zanotti stresses that his company’s solution is very well established. “We have just landed our 300th financial institution customer.” Branch banks, it seems, are widely recognizing the consumer relationship benefits of instant issuance.

On campus, at least six campuses are on board with instant issuance and, to date, all campus projects are relying on the CardWizard solution from DSI.

• The first implementation of instant issuance on campus occurred in 2002 at the University of North Carolina Chapel Hill. Wachovia Bank is the financial partner for the UNC One Card Plus, combining campus card functions and Visa check card offering.
• In 2005, Wachovia made the same program available for the University of North Carolina Greensboro and Mercer University.
• Oakland University in Rochester, Michigan partnered with Credit Union One to issue the MasterCard-branded version of its campus ID card beginning in 2005. The 18,000-student campus selected Credit Union One.
• In the Fall semester of 2006, Ent Federal Credit Union began issuing Visa branded cards for the University of Colorado at Colorado Springs’ campus card program and the university’s 7,800 students and 1,000 faculty and staff.
• This spring, U.S. Bank will launch its first instant issuance program offering Visa-branded cards at the University of Wisconsin Eau Claire.

The wave of the future?

CardWizard has already worked alongside many of the major campus card systems. “We have done the major ones out there,” adds Mr. Zanotti, “CBORD, Blackboard, General Meters.”

Costs for the solution, while not insignificant, seem reasonable when the total cost of a financial partnership is weighed. The additional hardware required consists of a separate photo ID printer, the embossing unit, and potentially some peripheral devices (e.g. PIN pad, standalone PIN encoder). Mr. Zanotti estimates the hardware investment at $15,000. Software fees are largely determined by the amount of customization required to integrate the instant issuance solution with the campus and bank issuance systems. For the CardWizard solution, he estimates $25,000 as the upper end of a typical installation.

The investment makes sense for the financial institution, suggests Mr. Zanotti, because “the money in ATM transactions is largely gone. Banks make money on signature-based Visa/MasterCard transactions.”

“It’s the only way to go,” says Mr. Zanotti, commenting on the future of branded campus cards, “because it really adds more functionality to the card.”