Bayer MaterialScience polycarbonate films cover chip modules in high-security credit cards

It's a market with much growth potential. High-profile data security failures in the last year have stoked consumer anxieties about their own digital security. The most high-profile of those failures came when retailer Target Corp. announced a massive breach of its customer account data.

Data thieves began their attack on Target customers early in the 2013 holiday shopping season—stealing information when Target shoppers paid for their purchases using magnetic-strip credit cards. Target discovered the data theft and immediately put a stop to it, and let the world know with an announcement on Dec. 19, 2013. Millions of consumers switched to other retailers to finish their shopping, and Target saw sales drop during what should have been some of its busiest days all year.

Target Corp. holiday season comparable store sales were positive up until the security breach was announced; sales in the last dozen days of December were so slow they ended up dragging sales for the quarter into the red. Comparable store sales ended the fourth quarter down 2.5%.

The Target security breach resulted in an immediate need for millions of new cards as issuing banks set about replacing the compromised cards. By late January 2014, Target estimated thieves took data from as many as 70 million individuals. Demand for replacement credit cards was further spurred by data breaches at Neiman Marcus, Michaels, and other retailers.

Rather than profiting on the misfortune of consumers, card material suppliers would much prefer to supply more capable materials for cards that are offer greater security as well as better personalization and faster production.

At the trade show in Las Vegas, Bayer MaterialScience exhibited Makrofol ID 332 Superlaser film, a laser-engravable film for security cards and other documents (pictured). It enables faster laser personalization speeds than other such films while maintaining high contrast and image quality. The company said cards using the film can be engraved as much as 20% faster than other cards with comparable construction and contrast levels. Defects, in the form of laser-induced bubbling, are reduced compared to other commonly used films.

The company's portfolio of polycarbonate films for card applications includes a very thin, white film (Makrofol ID 4-4 polycarbonate film) designed to cover chip modules integrated into the core of polycarbonate cards. This market—for cards containing EMV data chips—is poised for significant near-term growth.

Europay, MasterCard, and Visa—EMV—developed smart chip technology for use in cards, phones, and other instruments. The technology is widely regarded as an answer to reducing security failures such as the one that struck Target and its customers. The cards' embedded microprocessor chips store and protect cardholder data far better than magnetic strip cards.

Oberthur Technologies, one of the biggest EMV product suppliers, has put 1.5 billion chip cards into use worldwide. Speaking at CARTES America in mid-May, Oberthur's North American President Martin Ferenczi said the company has sped up manufacturing, installed equipment, and hired more staff to accommodate demand after the data thefts at Target and other retailers.

“We are on target to get millions of chip cards into the hands of American consumers in the next six months,” Ferenczi said. He predicts card counterfeiting will decrease and consumer vulnerability will decline as chip cards replace magnetic strip cards—and he sees a sense of urgency in the industry to get chip cards into the hands of consumers before the 2014 holiday season begins.