Card issuers
and networks are experimenting with ever more innovative ways to
market their cards to technologically savvy consumers. Card
personalisation and online marketing are proving to be the most
effective methods. Victoria Conroy

The world’s first incarnation of the credit card was launched 50
years ago and set the template for all payment cards. Consumers
were limited to a standard rectangular payment card, featuring
standard bank and card network logos. Functionality was more
important than style, as consumers were interested only in using
the card as a payment mechanism and nothing more, while card
issuers and networks had the advantage of being able to impose a
one-size-fits-all approach to card design and marketing.

However, in the internet age, it appears that consumers are getting
the upper hand – it is increasing consumer desire for
personalisation that is now dictating card design, and if issuers
and networks wish to keep their cardholders happy, they may have no
choice but to bend to the will of the cardholder. Increasingly, the
design of the cards themselves has become a major selling point, as
evidenced by the popularity of affinity cards worldwide. Photos of
loved ones, pets, football teams and other favoured designs can now
be added to a consumer’s payment card with relative ease, and this
in turn leads to those cards becoming the favoured cards to make
purchases and payments.

Overall, personalisation brings benefits to both the cardholder and
the issuing institution by deepening brand loyalty and promoting
usage of the card.

Competition drives innovation

A number of factors have come into play to bring about the trend of
personalisation. Firstly, the card payment industry is an
intensively competitive one. At the industry’s inception, only a
few financial institutions offered payment cards to consumers, but
nowadays virtually every bank has some form of credit and debit
card offering, and as issuers battle for market share, it is vital
that they differentiate themselves from the competition.

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It is harder than ever for banks and card networks to attract and
retain customers, and those institutions that offer cardholders the
ability to personalise their cards stand a better chance of their
cards becoming the customer’s ‘front-of-wallet’ card – the card
that customers most commonly reach for when making purchases or

Secondly, it is this increased competition that has led to much
greater consumer choice and expectation, especially in the internet
age. Cardholders are no longer limited to taking the cards banks
are willing to give to them. A quick search of the internet reveals
the best offers around, the cheapest annual percentage rates, the
best rewards programmes and incentives available. The internet age
has also brought about advances in technological design and
functionality of payment cards. Cardholders can pick from an array
of ecologically friendly card products, curved cards and products
that can feature personal photos or logos.

Young cardholders in particular are more accustomed than older ones
to advances in technology, and so expect more features and
functionality from their payment cards, in much the same way as
they expect greater functionality and innovative designs in
ubiquitous devices such as mobile phones and MP3 players.

Card as lifestyle object

Card issuers and technology vendors are realising that promoting
and delivering the card as a lifestyle object is the best way to
capture new cardholders and increase the number of transactions.
Another advantage of offering these personalised card services is
that, far from being a drain on costs, the ability to personalise
payment cards offers a lucrative revenue stream and a
cost-effective way to recruit new cardholders.

Serverside Group is a global technology provider specialising in
digital card design. The company has developed a range of online
marketing tools that enable card issuers and networks to offer
personalised card designs to customers, including personal
photographs, with Serverside hosting the card issuer’s creation
website. The company’s flagship product is AllAboutMe, which allows
cardholders to create personalised credit cards, gift cards and
debit cards using their own digital photos of a loved one, a pet, a
memorable event, a business logo or any photo they choose from
Serverside’s image library.

Serverside claims that these services enable card issuers to
establish much deeper relationships with their customers, by
enabling brand differentiation, increased card usage and higher
acquisition rates.

Serverside’s card issuing customers comprise 33 major issuers
worldwide, including ANZ, ING, Capital One, Fortis and Abbey, and
the company is currently in discussions with several other card
issuers around the world. The company’s success in the
personalisation market has led to the launch of similar card
customisation services by companies such as Gemplus and Oberthur,
the European smart card manufacturers. However, these companies
rely on dedicated third-party personalisation bureaus.

Gemalto entered the personalisation market in late 2006 with the
launch of its CardLikeMe web-based design service for EMV payment
cards. As with Serverside’s AllAboutMe product, CardLikeMe provides
users with an intuitive interface to upload a picture of their
choice on the bank website to create a personalised card. Once the
picture is loaded on the bank website, users can see the card’s
appearance in real time and adjust the photograph as they wish. The
image is approved by the bank before the order is placed. Users may
also choose a picture from a range of background visuals offered on
the bank’s online gallery (see image below).

Tom Elgar, co-founder and CTO of Serverside, spoke to CI about the
company’s offerings and how card issuers are making the most of
offering personalised cards to customers. “These days, online card
customisation is an essential channel for issuers to pursue as they
seek to engage current and future cardholders,” he said. “We can
all see that allowing consumers to author their own content – and
this extends to designing their own cards – is a major new trend of
the democratic, second-generation internet era. It’s hardly
surprising, then, that there are new entrants into this space,
which is evolving at a rate of knots. You could say it’s good news
for Serverside, as it confirms there’s a market for what we

Targeting consumer segments

Such web-based photo personalisation services may be all the rage,
but card personalisation and experimentation with card design is
nothing new. For many years, issuers have been tailoring their card
offerings and marketing campaigns to a distinct range of consumer

Japanese card consortium JCB offers several card products with
differing designs depending on the consumer group being targeted.
In December 2005, JCB announced that it had issued more than
500,000 JCB Linda women-orientated cards since the card’s launch in
2002. JCB expanded the offering by launching the JCB Linda Sweet
Card, a scented card. According to JCB, over 70 percent of Linda
cardholders are women in their 20s and 30s, and 72 percent of them
always carry the card in their wallet.

Other major issuers such as Citibank also offer tailored cards to
different consumer segments, such as women’s cards and youth cards.
MBNA, now part of Bank of America, is the leader in affinity cards
– payment cards that can be linked to consumer-selected
organisations such as charities and favourite sports teams. Most
recently, in the UK, Barclays launched the UK’s first
carbon-neutral debit card, which is being rolled out to the bank’s
11 million debit card users. The card is marketed as being
environmentally friendly with a distinctive design.

Reinforcing loyalty

However, it appears that consumer-designed cards could become a way
of spanning demographic differences by giving all cardholders the
ability to choose which design to place on their cards.
Personalisation allows consumers to establish their cards as
individually designed, and at the same time it reinforces the
consumer’s loyalty to the issuing institution.

Serverside’s Elgar said: “We feel that customised cards will evolve
from a way for issuers to differentiate their brand and product
offering, as things stand at present, to a commodity offered by all
issuers and, importantly, expected by consumers. The growing trend
of personalisation and consumer creation is symbolised in the
phenomenon of user-generated content. Marketing outlets such as
Myspace and YouTube have seen enormous growth and profits by
allowing users to create their own content then share their
personal creations online with others. Consumers no longer expect
to be offered a one-size-fits-all proposition. Personalisation and
choice are now expected across all consumer product offerings, and
that includes payment cards.”

Such expectation of service offering could also prove to be a
valuable revenue stream for card issuers and a way to establish
lasting consumer loyalty to a card issuer. Some issuers offering
Serverside’s personalisation service charge an upfront fee, while
others charge a fee for subsequent replacement card designs. Other
issuers have opted to charge no fee at all in order to appeal to as
many consumers as possible. CI asked Elgar how issuers could turn
personalisation services into a revenue stream.

“The biggest revenue opportunities lie with generating loyalty,
that is, establishing an emotive connection between customer and
card. When cardholders design a card online, they are investing not
just time but thought and effort. The quality of designs that
people produce is extraordinary and the result is something that
reflects what is important and personal to them. This strong bond
creates a card that is placed in a ‘top of wallet’ position – the
place where all issuers want their cards to be. Of course,
acquiring cardholders using online techniques is also considerably
more cost-efficient than traditional approaches, such as direct
mail. For example, a prominent US consulting company,

RK Hammer, recently stated that while the average across-the-board
cost to acquire an active account is $95, the cost to acquire
active accounts via the internet is $20. That’s quite some
difference,” Elgar said.

“Whether issuers charge for card customisation depends on their
specific marketplace and how the product is positioned. Profit
margins for a prepaid card are generally much less than debit,
which are in turn less then credit offerings. We have seen many
issuers offer the service for free initially then introduce a fee
structure later in the product life cycle.”

Safeguards are in place to ensure that the images chosen by
cardholders do not contravene legal, copyright or licensing
restrictions. Elgar said: “The card associations require all images
placed on cards to be checked against specific content guidelines.
Card association rules forbid the use of copyright images of
celebrities or sport stars, while individual banks often have rules
governing the use of political, racial or indecent images.
Fortunately, a key Serverside asset is its ability to manage the
images with which cardholders personalise their cards.”

Elgar said that besides the company’s expertise in personalisation,
it can also draw upon significant marketing knowledge, particularly
in the use of online viral marketing via the internet. “Serverside
was fortunate enough to see the potential for online card
customisation as early as 2003. Since that time, we have not only
built a market-leading service offering personalised card designs,
but have also created a suite of products to allow card marketers
to quickly and successfully launch programmes using the latest web
functionalities and techniques. From the very beginning we have
taken the necessary legal measures to recognise the intellectual
property rights of our technology and have invested a great deal of
financial commitment and time to preserve our innovations.

“With 33 card issuer customers in 14 countries around the world,
covering 40 banks with over 50 programmes, Serverside prides itself
on not only knowing the best way to implement a card customisation
programme but also how to provide marketing expertise on how
issuers should best market the service to their customers. We also
have a growing portfolio of patents applied for surrounding our
innovations and expect the first of these to start to crystallise
during 2007.”

The use of online viral marketing is proving to be much more
effective than traditional marketing routes, such as direct mail.
In December 2006, Belgian bank KBC revealed that 120,000 of its
banking customers uploaded a favourite picture onto their payment
cards in the four months after it began offering the service in
conjunction with Serverside, meaning that 1.2 percent of Belgium’s
population of 10.3 million people are now carrying an individually
designed KBC card in their wallets. According to KBC, 20 percent of
this figure is made up of new cards and 80 percent are replacements
of existing cards. The age span for those choosing to personalise
their cards runs from ten years old for the youngest to 94 for the

As an example of how issuers are reaching out to customers in new
ways, KBC carried out the bulk of its marketing campaign for the
service through a range of online methods, including an e-mail
campaign and using links from the bank’s online banking
application. KBC acquired around 24,000 new cards and 7,600 new
banking customers during the four-month campaign, which Serverside
said reflected the huge consumer interest and demand for customised
cards and also reflected the effectiveness of online marketing in
comparison to direct mail campaigns.

Direct mail

In the US, direct mail has been the traditional way of acquiring
new customers, although the level of effectiveness has fluctuated
in recent years. According to US financial services group and
research house Credit Suisse First Boston (CSFB), the intense
competition within the US credit card market has taken on more
importance given the continued sluggish industry balance growth and
increased industry consolidation.

CSFB claims that direct mail volume slowed over the second half of
2006. Industry mail volume totalled 683 million pieces in October
2006 (on a three-month rolling average to adjust for timing
differences in the collection of the mail), 1 percent below
September and 8 percent lower than a year ago. This reflects a
continued deceleration from September’s 6 percent year-over-year
decline, says CSFB.

Mintel Comperemedia, which monitors direct mail campaigns
undertaken by major US card issuers, claims a growing number of
marketers are embracing advanced customer data and analytics
tactics for event-triggered marketing campaigns, but many still
struggle to provide more than a one-dimensional level of
personalisation to help differentiate their efforts. Research
commissioned by Mintel reveals that 44 percent of US card marketers
are introducing an element of personalisation in every e-mail
campaign they send, yet over 80 percent modify only the salutation
and a few basic content elements. Some 66 percent of direct mail is
personalised, representing little change over the past three

Increasingly, consumers are paying attention to the relevance of
the content and context of a marketing message, meaning that card
marketers can no longer rely on strategic placement of a
recipient’s name or other customer data in a marketing
solicitation. Marketers are turning to the utilisation of data and
analytics programmes that identify relevant geographic and
demographic information in order to enhance behavioural targeting.
Inevitably, that means that card issuers and marketers will make
more effective use of web-based marketing and promotional campaigns
that have been built upon such analytics, as is the case with
targeted internet banner marketing.

Given the weakening response rates for direct mail, CI asked
Serverside how its issuing clients exploit the use of online viral
marketing in attracting customers, and what it means for
traditional customer acquisition methods like direct mail

Elgar replied: “The financial industry has seen a dramatic decline
in direct mail response rates, which fell to an all-time low of 0.2
percent last year. And as the response rate drops the numbers sent
increases. The amount of wasted paper this represents is hideous –
we have a ‘back of envelope’ calculation that suggests this is
equivalent to an area of woodland twice the size of Manhattan
island each year in the US alone. Serverside lets its clients reach
their audience though the next generation of communication – online
marketing. This form of communication has the ability to reach
millions of consumers at little to no cost.

“The most popular method to expand reach and increase returns is
the concept of viral marketing. Viral marketing allows users to
become individual brand advocates themselves and extend the
marketing message by their own choice to friends and family.
Serverside capitalises on this marketing potential by allowing its
clients to offer their own customers a way to share the excitement
and pride of personal card creation in many ways, including online
design contests, share-a-design e-mail offerings, blog and banner
communications and advertisements, and unique image content and

Trends in personalisation

Also, the internet itself is undergoing a constant evolution as
more functionality is embedded, and consumers become familiar with
using web-based technology to customise a range of products. CI
asked Serverside’s Elgar what he saw as the major trends in the
card personalisation market.

“The arrival of second-generation internet technology is empowering
consumers and unleashing their creativity like never before. In
fact, online card customisation, as offered by Serverside, is just
another element of the user-generated content tidal wave that is
sweeping away traditional consumer and corporate relationships. As
this internet technology gathers momentum, so customisation will
become more and more fragmented. Reacting to mass customisation,
the ‘long tail’ of millions of cardholders and cardholder groups,
with their differing demands, is the main challenge and opportunity
faced by issuers. Thankfully, new printing technology, including
Serverside’s, is allowing card issuers to grab this opportunity by
the scruff of the neck,” Elgar said.

“Serverside, for example, is working closely with Datacard [a
payment service provider] and its new Artista VHD 600dpi colour
printing module. Utilising Serverside’s software technology and the
latest printing technology, image warehouses can be accessed to
drive production of stock and personalised cards. The partnership
with Datacard has potentially valuable benefits for issuers…
Serverside’s new online card management product, Virtual Portfolio,
takes the guesswork out of card marketing by providing a way to
print cards at the point of cardholder demand through online
tracking, which triggers the actual card production. This leads to
a significant reduction in cost by reducing the risks in holding
card stocks and increasing the speed to market. The convergence of
internet and printing technology is a phenomenal opportunity for
card issuers, and understanding how to leverage this convergence is
an absolute must.”