South Africa: Crossgate Technologies launches its new R25 card facility

Payment services group Crossgate Technologies has launched a new R25 million card production facility in Cape Town, localising EMV card production for banks and other groups in South Africa.

EMV is the payment standard used in chipped banking cards and other smart cards used across the world. The name is derived from the standard’s founders -Europay, Mastercard, and Visa.

EMV is used by payment schemes to drive interoperability between chip-based payment cards, which store and encrypt sensitive cardholder information on a microprocessor chip. The new Western Cape personalisation facility is where these chip cards will be encoded and fulfilled for onward distribution to banking customers and their cardholders.

According to Crossgate, the facility is the first 100% South African-owned EMV card personalisation facility in Cape Town with Payment Card Industry Card Production (PCI-CP) certification and will see further investment in locally developed IP and technology in addition to more secure supply chains.

This will see cards being processed and delivered faster and more securely in the country, the group said, while at least three local banks have signed on to adopt new ways of provisioning cards – including to wearable devices.

“(Crossgate) will be provisioning cards to wearable and mobile devices on behalf of banks and fintech issuers. Three major local banks and two African banks that share Crossgate’s vision of taking South Africa and Africa’s banking into the future have already finalised agreements.

“Crossgate has also extended its offering to enable fintech innovation and Banking as a Service capability,” it said.

Despite South African consumers increasingly exploring digital payment methods such as cryptocurrency, digital cards and biometric payments, traditional bank cards remain king, according to the Mastercard New Payments Index 2022.

Reasons include security (79%), ease of use (51%) and the rewards offered (44%). However, until now, three European multinational companies monopolised the local bank card supply chain.

The group said that it was approached by various banks to provide an alternative local solution for in-country card personalisation and processing as well as last-mile distribution.

EMV capabilities are currently centralised Johannesburg through foreign-owned multinationals, the group said, which has created a “supply chain concentration risk”.

“Without a backup option at least 1,000km away, should an event unsettle the city, the entire banking card issuing industry could be brought to a standstill,” it said.

Through the new facility, banks and other fintechs and consumers can now obtain, replace and activate bank cards at 3,000 mainstream retail outlets. The group also has a partner network of 250 independent stores in rural areas that will give customers the ability to open bank accounts.

“We are aiming to work with a further 2,000 community stores and individual agents to assist in advancing financial inclusion in under-serviced markets,” it said.

Crossgate supplies more than 300 million cards to the retail and banking sectors, including some of South Africa’s leading financial institutions and Mastercard Middle East Africa.

In the finance sector, it works with Absa, FNB, Old Mutual, while it also lists Mr Price, Checkers, Game, TFG, Pick n Pay and Woolworths among its clients.

The group said it will leverage its localised facility to expand into the rest of Africa to advance digital payments across the continent and other emerging markets.

Source: BusinessTech