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How a Credit Card Is Made

Where do credit cards come from? There is a very good chance the credit cards in your wallet were manufactured at CPI Card Group, just outside of Denver. CPI produces more than 1.2 billion cards each year including credit cards, debit cards, transit cards and gift cards, and its headquarters in Littleton, Colo., produces more than 250 million credit and debit cards each year for many of the largest card issuers in the United States.

CPI invited me to take a tour of its facilities in Littleton to follow the life of a credit card. Here’s how a credit card goes from jut a glimmer in the eye of a financial institution to the plastic in your wallet.

How a Credit Card Is Made

First, banks, credit unions and retailers work with the CPI to design a card with the exact look, feel and functionality desired. The artwork is then transferred to either aluminum plates or silkscreens, similar to how T-shirts are made. Next, the design is printed onto two plastic sheets large enough for dozens of cards, one for the front of the card and one for the back. The two plastic sheets are then sandwiched between two thin shiny transparent films that give the cards their glossy look and contain the magnetic stripe. Increasingly, cards are now equipped with electronic components that are sandwiched in the middle.

From there, the layers are sent to an oven where they are baked together, before being cut into a single, familiar piece of plastic. Still, the work is only half-complete. If the card is to be equipped with an EMV smart chip, a hole needs to be machined and the chip glued on. Next, the card has to be personalized with the name, number, expiration date and security codes specified by the card issuer. Finally, CPI can even package and ship new cards directly to consumers, especially those who need an urgent replacement.

Ultimately, it costs card issuers as little as 10 cents each for simple, traditional plastic cards, about $1 to $2 each for cards equipped with EMV smart chips and contactless payment systems (where the card is just waved over a terminal), and much more for prestige cards made of metal or other alternate materials.

The entire process is conducted under tight security, to comply with standards set by Visa, MasterCard, American Express and Discover. In fact, each blank piece of plastic is coded and tracked throughout the entire process.

Far More Than Printing Plastic

Anyone who believes that card manufacturers such as CPI are simply printers would be mistaken. As Steve Montross, CPI’s president and CEO explained, “CPI is in the business of handling data, be it on a plastic card or using the next generation of technology.” For example, an increasing number of credit cards CPI makes now contain EMV smart chips, which generate encrypted codes specific to each transaction.

In addition, CPI offers card issuers a vast array of options. Cards can have a look and feel that can include transparency, holographic images, custom textures and even odors that you have to scratch to smell. CPI can also provides card issuers with alternate materials that range from high-end metallic compositions to more environmentally friendly plastics or even wood. Finally, CPI works with its suppliers to offer card issuers advanced electronics that can include digital readouts of secure, one-time-use codes.

The Future of Credit Cards

The next generation of credit cards can already be seen in Canada and Europe, where many retailers require cards equipped with EMV smart chi ps. Had this system been available in the U.S., it wouldn’t have prevented the recent high-profile security breaches at Target and Neiman Marcus stores, but the stolen data could not have been used at bricks-and-mortar stores, just at a small percentage of websites.

Although American cardholders are just starting to see EMV chips embedded in their newest cards, the future of credit cards is rapidly progressing. By October 2015, card processors will introduce a “liability shift,” which means that the cost of fraud will be incurred by the least secure party in the transaction. For example, if the card issuer failed to provide its customers with a card equipped with an EMV smart chip, but the retailer was equipped with an EMV-compatible terminal, the card issuer takes the loss. But if the card has the latest technology and the retailer does not, the merchant is liable for the fraudulent transaction. So while October 2015 will not be a hard cutoff of our reliance on outdated and vulnerable magnetic strips, the economic incentives to deploy newer technologies should ensure rapid deployment later this decade.

Yet EMV and contactless payment systems are just the next step toward producing more secure and convenient credit cards. As Montross explained, “Your cellphone already contains a credit card, since Near Field Communications, a form of contactless payment technology is built into its SIM card.” He predicts that all of our credit cards’ functionality will first be uploaded to our smartphones, and later to the Internet cloud.

Montross is not worried that plastic cards will become obsolete, since people will always need a backup plan for when their phones break, lose their signal, or just run out of battery power. Besides, the latest card designs being produced are so attractive that consumers will just want to hold one in their hands.

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