Category: Innovation/Technology

EMPLOYEE SPOTLIGHT: RE‑ENGINEERING QUALITY

CompoSecure has gone to great lengths to protect its employees during this pandemic. There are many new security protocols and safety processes in place, but who is in charge of ensuring all requirements are met, and metal card production is smooth sailing? Meet Mary Levitsky, one of the Quality Engineers at CompoSecure. She ensures the company meets all the ISO regulations, 3rd party requirements, and that everyone is following the company’s high standards for quality. “Bottomline, I make sure everything exceeds expectations,” Mary confesses. Her dedication has ensured that CompoSecure’s customers get the best product possible because all the work is done properly and facilities are operating at optimal capacity.

It Takes a Village

Mary will be the first to tell you, she is not alone. There are many tasked with overseeing the quality standards at the different CompoSecure facilities on each shift. Everyone has a role to play in the success of operating during this pandemic. From the board room to the mailroom, each and every CompoSecure employee has stepped up to do their part to improve metal card manufacturing and reduce the risk of COVID-19. This includes the necessary social distancing, PPE for everyone, thermal imaging cameras for temperature checks, segregated facilities, staggered shifts, and contact tracing badges for all employees to measure interactions. Mary points out that these safety measurements are essential to ensuring necessary workers on-site feel comfortable on the manufacturing floor.

Company management has shown its overwhelming support for all employees through texts, emails and virtual meetings/lunches, as company leaders worked to calm fears and help staff adapt to this new normal. From Mary’s first interview at CompoSecure, she noticed something different: “that the company had a spark, that they were onto something bigger and better. You can see that love, focus on the team and an abiding respect for all.”

Mary and the entire CompoSecure team has re-engineered the way quality checks are done and made issue resolution a top priority. These two essential functions are even more critical because of a pandemic. Problems always come up, and being able to address them quickly and safely, while ensuring our social distancing efforts, has helped CompoSecure continue to be successful.

Hardships Breed Compassion

Mary is no stranger to challenges in her life.  She has lost loved ones, been through job layoffs, taken care of disabled family members and has been the moral support for her sister after being diagnosed with COVID-19 as a frontline worker. Facing hardships throughout her life has only spurred Mary’s empathy for helping those in need in her community. In addition to supporting her sister with weekly meals, Mary volunteered at the Arc of Somerset, an organization that helps those with intellectual and developmental disabilities, before the coronavirus limited activities with the non-profit. She also serves at an animal shelter, works with local animal rescue groups and plays “foster mom” to three Pitbull puppies. She is passing on her parents’ legacy – “to take care of each other – that means the folks I work with my community and with the organizations that I’m involved with.”

CompoSecure works with its employees to fuel their passion for serving the community and finding ways to help its neighbors. The company and team members individually are very active in the local and regional communities through volunteerism, mentoring and financial support. CompoSecure has donated thousands of volunteer hours, almost 1,000 pounds of food & clothing and over $100,000 in cash donations to local charities and organizations.

Silver Lining

As the company adapts to this post-COVID world, Mary believes that many lessons have been learned from this pandemic. For instance, CompoSecure has learned to be flexible with how it communicates with its clients, being more efficient with resources and find new ways to enhance the customer experience. In addition, the team camaraderie has strengthened due to the strong support from CompoSecure’s leadership and management.  “It is all the little things that leaders do that add up to a cumulative result with employees. I bleed Compo blue. Tried and true.“

Mary, we are grateful to you and proud you are a member of our team.

The Future of Contactless Payments in the COVID Era

The Future of Payments in the Era of COVID: Contactless Payments

We aren’t saying that cash will be a thing of the past, but we do believe that contactless card payments will soon be the de facto standard of the future. Just like Zoom has become the norm, so will contactless payments. The COVID pandemic has consumers asking why don’t we have this, and merchants stepping up the conversion of their readers to make customers more comfortable. No one wants to expose themselves to potential health risks by touching cash or a payment keypad. Recent MasterCard data shows that contactless payments increased 40% in Q1 compared to the previous quarter as the global pandemic worsened. This surge will continue according to a recent American Express survey that states 58% of consumers who have used contactless payments in the past are more likely to use them moving forward.


The Psychology of Contactless

Consumer behavior is changing before our eyes. According to recent Visa data, 31 million Americans tapped a Visa contactless card or digital wallet in March 2020, up from 25 million in November, with overall contactless usage in the US growing 150% since March 2019.  This follows the global trend, where 60% of Visa transactions outside the US are already using contactless. Consumers want to get in and out of stores quickly with minimal contact during the transaction. There is a new, COVID-caused psychological factor prevailing.

A recent Mastercard consumer survey substantiated those fears around payment transactions. Since the pandemic, half of consumers have an increased preference for contactless payments, with a third of US consumers claiming to use their contactless card more than other cards in their wallet. Nearly half of consumers wipe their payment cards clean after using them, which points to the top reason 77% of consumers prefer contactless payment: it is a “cleaner” way to pay. This focus on hygiene is demonstrated in that more than half of US consumers do not want to provide a signature at the point of sale.

The Business Case for Contactless 

The migration from cash to contactless can prove attractive economics to merchants and the banking industry. From a merchant perspective, contactless cards speed up the checkout process and improve the customer experience because it is faster, more convenient and more efficient. For financial institutions, data from A.T. Kearney and Visa show that banks could generate an estimated $2.4 billion in incremental earnings over the next five years due to increased contactless card usage while achieving an industry-wide cash-handling cost savings of up to 6% of annual consumer banking operating expenses. These estimates were based on contactless adoption statistics in markets similar to the US which showed that financial institutions on average achieved an increase of 20-30% in transactions in the three years following the acceleration of contactless cards, which translated to 5-40 new transactions per card per year.

 

COVID created an inflection point for cash to card migration and the adoption of contactless card payments, but also brings challenges for mobile payments which are complicated by the use of masks and other PPE.

 

The Digital Wallet vs. Contactless Payments

The technology for tapping a contactless card is virtually interchangeable with digital mobile payments such as Apple Pay or Google Pay. Merchants that accept a tap from a card also can typically accept a tap from a phone. So, what technology will win out? We believe cards have served consumers extremely well for more than 50 years and that adding contactless capabilities to the card is an easier behavioral change than shifting to mobile wallets. This new technology has solved a real consumer pain point and the adoption curve follows. For example, I no longer store 30+ CDs of music in my car or carry a book of paper maps because each of these were not a good consumer experience and were transformed by something significantly better. While COVID will provide an inflection point for cash to card migration and adoption of contactless, I recently tried an Apple Pay transaction while wearing a mask and found using a card for a tap-to-pay transaction was significantly easier.

The latest data from PYMTS.com indicates that digital wallets are actually decreasing in their share of eligible transactions from 6% in 2019 to 5.1% in 2020 with Apple Pay at just 0.9% of retail sales (excluding online and vehicle sales). Pew Research believes this is because of lack of trust for this digital technology. Across all generations, there were persistent concerns about the security of digital wallets and indications that consumers have more trust in traditional methods, such as physical cards.

Digital wallets have been around for more than a decade; however, recent data shows that only 15% of consumers made an in-store transaction with a digital wallet in late 2019. The number one reason for consumers not adopting a digital wallet was “no need/not interested” (36% of non-users). The Forbes article supports what we have seen from our customers: “the near-term contactless cards will have broader market appeal than contactless digital wallets given that they encourage an evolutionary, rather than revolutionary, behavior change.” In fact, A. T. Kearney states: “US consumers are interested in contactless cards as they are perceived as “fun and exciting,” secure and simple. Moreover, contactless cards are the future of payments … given how prominent contactless cards are in other countries.”

The Time is Now

The market saturation is reaching a tipping point according to Visa data. The US now has the most contactless cards of any market globally at 175 million, with nine of the top ten US issuers actively distributing new contactless cards. New analyst research predicts that contactless cards will exceed initial estimates for the year by 110 million because of the coronavirus. This figure will bring the total number of contactless payment cards in worldwide circulation to more than 2 billion by the end of the year.

In the same vein, merchants have been steadily upgrading POS terminals, shipping 47.8 million contactless units globally in 2019, bringing the total to 100.4 million worldwide, which is now 62% of all POS terminals, according to the latest researchSome issuers are seeing nearly 70% of face-to-face transactions in the US becoming tap and pay purchases. We expect this number to explode in 2020 due to the coronavirus. Card issuers are promoting tap and pay usage by raising the purchase limits for contactless purchases. For example, in April, UK merchants saw approximately a 50% reduction in the number of times customers touched the POS because of the increased limits on contactless purchases. Globally, contactless payments continue to multiply with the latest data estimating that contactless terminals will increase at a compound annual growth rate (CAGR) of 12.9% from 100.4 million units in 2019 to 184.5 million units in 2024. This means that by 2024 more than 88% of the world’s POS terminals will be contactless, up from 62% in 2019.

COVID provides a simple and effective messaging opportunity for financial institutions to drive contactless payments in addition to transaction lift. It is a crucial time in our industry because contactless promotes and capitalizes on social distancing in addition to the typical speed and convenience benefits, which are often touted as the primary drivers of adoption.

New concerns and conveniences are shaping the landscape of how consumers prefer to pay. Though unexpected circumstances are driving rapid changes in behavior, it is up to the payment card industry to continue to innovate and issuers to be ready to meet evolving demands.