Since the Broadway premier of Hamilton in 2015, the critically acclaimed musical has become an American classic. The release of the recorded version, which started streaming this summer, finally gave me an opportunity to watch and enjoy.
What does Hamilton have in common with instant card issuance? Alexander Hamilton was the lead architect of the American banking system, a system that is changing rapidly amid a global pandemic, long-term consumer payment trends, and the challenges banks and credit unions face to meet rising demands for instant card issuance .
Debit and credit card use has seen steady growth over the last few decades, becoming the preferred forms of payment for a generation. The use of debit cards in particular outpaces every other payment method including cash and mobile. While in recent years mobile payment cards have gained traction among younger consumers, the use of physical cards, including contactless, continue to lead the way. Today, as social distancing practices have led to increase use of remote and mobile payments to avoid physical contact, card usage is at an all-time high. Deployment and use of contactless cards is growing rapidly. A recent study conducted by Mastercard found that 79% of consumers are already using contactless cards for safety and cleanliness. According to Visa, in the United States alone, one third of physical cards are expected to be contactless by the end of 2020.
The growing use of contactless cards has created increased demand for instant issuance, with cardholders expecting their banks to offer this service on site. As a result, financial institutions are adopting technology to enable them to instantly issue new and replacement cards (including contactless) to consumers, on premises. Traditionally, cards were processed in bulk at bureaus before being mailed to customers. This typically took days or weeks. To meet customers changing needs, a growing numbers of banks and credit unions now offer instant issuance right at their branches – socially distanced though drive-in windows and self-serve kiosks. Bringing this capability to the branch requires technology not previously deployed at this level.
Addressing the challenge
The surging demand for instant issuance presents challenges for banks. How to secure customer data, while keeping pace with evolving card formats, and ensuring compliance with government and industry data security regulations? Issuing cards at a branch requires collecting, exchanging, and processing sensitive personally identifiable financial data. Protecting this data end-to-end is critically important. Programming the card to evolving formats set by the card companies must also be done in adherence with strict cryptographic processes. As the industry continues to evolve from magnetic stripe to EMV chip, to dual-interface contactless, having the right cryptographic engine is vital to ensure banks can keep pace with evolving data security needs.
Entrust Datacard has built an integrated solution that fulfills the needs of banks with an adaptive issuance software and a robust root of trust, using its Entrust nShield hardware security modules (HSMs). The Adaptive Issuance Key Management Software adjusts to different card formats, and ensures that the software is protected from the rest of the network, using a dedicated nShield issuance hardware security module (HSM) to handles cryptographic operations.
HSMs are specialized appliances that operate independently of applications, and typically attach to the network to safeguard and manage keys used by applications, and perform cryptographic operations on behalf of applications. Some HSMs also run sensitive applications inside the protected environment, allowing critical keys and software to be isolated from the host system, and segregating the security domain from the rest of the network. Enforcing defined security policies and controlling access to the security domain with dual supervision, no single individual or entity can change key use policies. Cybersecurity professionals consider the use of HSMs a best practice, and in fact, HSMs enhance security across a wide spectrum of applications.
Instant issuance is all about being able to deliver immediate customer satisfaction, and that is where the integrated solution comes into play, enabling fast and reliable card issuance, with the highest level of security.
Why we need a root of trust?
There are various reasons why a root of trust is important when deploying an instant issuance capability. Software security can never match the level of robustness that hardware can deliver. Having a dedicated HSM safeguards critical keys and applications, and strengthens the security of the process.
The Entrust Datacard instant issuance solution supports high transaction rates, making it ideal for high-volume environments where throughput and uptime are critical. High cryptographic capacity allows the FIPS 140-2 Level 3 certified nShield Issuance HSM to perform vital functions for card issuance, including EMV data preparation, key generation, and data protection, while keeping pace with evolving security standards and key and certificate requirements for contactless card profiles.
Alexander Hamilton could have never imagined the impact that future digital technologies would have on the banking system he designed for America. Leading solution providers like Entrust Datacard have the expertise to address the challenges of today and tomorrow.
Learn more about instant issuance of debit and credit cards.