We are a leading provider of comprehensive Financial Payment Card solutions
in North America. We define “Financial Payment Cards” as credit,
debit and Prepaid Debit Cards issued on the networks of the “Payment Card
Brands” (Visa, MasterCard, American Express and Discover) and Interac
(in Canada). In 2015, we produced over 156.6 million EMV Financial Payment Cards
and provided integrated card services to over 3,250 card-issuing banks. We define
“Prepaid Debit Cards” as debit cards issued on the networks of the
Payment Card Brands, but not linked to a traditional bank account. We have established
a leading position in the Financial Payment Card market through more than 20
years of experience and are focused primarily on this growing subsector of the
financial technology market. Our customers are primarily leading national and
regional banks, independent community banks, credit unions, managers of prepaid
debit programs, “Group Service Providers” (organizations that assist
small card issuers, such as credit unions, with managing their credit and debit
card programs, including managing the Financial Payment Card issuance process)
and card processors. We serve a diverse set of over 4,000 direct and indirect
customers, including many of the largest North American issuers of debit and
credit cards such as JPMorgan Chase, Bank of America and Wells Fargo, the largest
global managers of Prepaid Debit Card programs, including InComm, Green Dot,
Blackhawk Network and American Express, as well as thousands of independent
community banks, credit unions, Group Service Providers and card processors.
We serve our customers through a network of ten production and card services
facilities, including eight high-security facilities in North America, each
of which is certified by one or more of the Payment Card Brands and Interac
(in Canada) and, where required by our customers, certified to be in compliance
with the standards of the Payment Card Industry Security Standards Council (the
“PCI Security Standards Council”). We have the largest such network
of high-security production facilities in North America, allowing us to optimize
our solutions offerings to serve the needs of our diverse and long-term customer
base.
We estimate that we produce approximately 35% of all Financial Payment Cards
in the United States, which we believe gives us the #1 market position by unit
volume. We believe we have:
the #1 position in the U.S. prepaid debit market (which represents the fastest
growing subset of the Financial Payment Card market in the United States), serving
the top five U.S. Prepaid Debit Card program managers;
a leading position in the U.S. large issuer market, serving the majority of
the top 20 U.S. debit and credit card issuers; and
the #1 position in the highly attractive U.S. small issuer market, which includes
independent community banks and credit unions, driven by our strong relationships,
capabilities and technologies.
We have grown our business significantly over the past decade, both organically
and through acquisitions. Over that time period, we have completed six acquisitions,
significantly increasing our geographic and market coverage, solutions offerings
and capacity. On March 9, 2010, we purchased certain assets of Premier Card
Solutions, a leading provider of Financial Payment Cards, data personalization
services and tamper-evident security packaging for Prepaid Debit Cards that
utilize the payment networks of the Payment Card Brands. The Premier Card Solutions
transaction significantly enhanced our offering to Prepaid Debit Card customers.
On September 2, 2014, we acquired EFT Source, a recognized leader in the financial
technology industry that was named to American Banker and Bank Administration
Institute’s FinTech Forward 100 in 2013, 2014 and 2015. The acquisition
of EFT Source significantly enhanced our card services offering, added Card@Once®
to our instant issuance card offering and expanded our end-to-end Financial
Payment Card solutions.
In addition to our eight North American facilities, we have two facilities
in the United Kingdom that produce retail cards, such as gift and loyalty cards,
that are not issued on the networks of the Payment Card Brands, and personalization
services.
Our business consists of the following reportable segments: U.S. Debit and Credit,
which primarily produces Financial Payment Cards and provides integrated card
services to card-issuing banks in the United States; U.S. Prepaid Debit, which
primarily provides integrated card services to Prepaid Debit Card issuers in
the United States; and U.K. Limited, which primarily produces retail cards,
such as gift and loyalty cards for customers in the United Kingdom and continental
Europe, and which are not certified by any of the Payment Card Brands or to
be in compliance with the standards of the PCI Security Standards Council. Businesses
not considered part of these segments are categorized as "Other" and
include our operations in Ontario, Canada and Petersfield, United Kingdom. In
August 2015, we completed the shut down and closure of our operations at our
Petersfield, United Kingdom facility. The Petersfield, United Kingdom facility
is not material to our business. Also included in “Other” is our
corporate headquarters.
Leading Market Position with Long-Term Customer Relationships. As a market leader,
we have long-standing trust-based relationships with our key customers and often
deep process and technology integration, particularly in the case of customers
who utilize our card services and instant issuance systems and services. The
solutions that we provide require strict data integrity, and generally card
issuers are reluctant to switch away from trusted providers due to the requirements
for high-security and access to highly-sensitive cardholder information. As
a result, our customers are selective about the partners with which they work
and typically seek out partners who have a well-established reputation for trust
and quality and are able to meet their service requirements.
We have long-standing relationships with our customers, many of whom we have
served for decades and provide a differentiated level of service, as evidenced
by our strong net promoter score, a customer satisfaction metric developed through
customer satisfaction surveys conducted by an independent market research firm.
We also maintain important relationships with the Payment Card Brands to ensure
our facilities and processes consistently meet their standards.
Well Positioned for EMV Conversion in the United States. As a leading provider
of integrated credit, debit and Prepaid Debit Card solutions in North America,
we are well-positioned to capitalize on the U.S. market conversion to the Europay,
Mastercard and Visa (“EMV”) chip technology. EMV is a global, technical
standard, maintained by EMVCo for smart payment cards, and for payment terminals
and automated teller machines that accept them. EMV cards are smart cards (also
called chip cards) which store data on integrated circuits rather than magnetic
stripes, although EMV cards may have magnetic stripes. EMV cards can be contact
cards that must be physically inserted (or “dipped”) into a reader,
contactless cards that can be read over a short distance using radio-frequency
identification (“RFID”) technology, or cards with both contact and
contactless functionality (“dual-interface EMV cards”). We serve
our customers through a network of ten production and card services facilities,
including eight high-security facilities in North America that are each certified
by one or more of the Payment Card Brands, Interac (in Canada) and, where required
by our customers, certified to be in compliance with the standards of the PCI
Security Standards Council. We have made significant investments in our physical
infrastructure and equipment platform to prepare for the EMV conversion, including
opening a dedicated EMV technology center in Colorado for EMV Financial Payment
Card production and personalization, and significant information technology,
human capital and equipment upgrades across our network of facilities.
Comprehensive End-to-End Card Solutions Drive Deep Customer Integration. The
foundation of our strong market position is our comprehensive end-to-end Financial
Payment Card solutions. Our solutions provide a full suite of products and card
services required to produce, personalize and fulfill Financial Payment Cards,
while maintaining the stringent security requirements of the Payment Card Brands.
We are integral to many of our customers’ card programs, pairing card
production with an end-to-end offering of card data personalization and card
services that are deeply integrated within our customers’ operations.
We provide card data personalization services for financial institutions and
managers of Prepaid Debit Card programs that require extensive technology integration,
such as secure data links to transfer highly sensitive cardholder information.
Similarly, our installed base of instant issuance systems at bank and credit
union branches across the United States require comparable levels of customer
integration, as our Card@Once® instant issuance system utilizes only our
secure technology to instantly personalize cards. Certain customers have also
integrated our proprietary software into their customer-facing websites to offer
card design and customization to their cardholders. We believe that our comprehensive
solution allows our customers to choose a single trusted partner to address
their card program needs in a cost-effective manner instead of managing multiple
suppliers across a complex value chain. We believe our customers choose and
retain us for these critical functions, which typically require integrations
that are costly and complex, due to our reputation as a trusted partner, our
high levels of service and proven execution.
Certified Network of North American High-Security Facilities. Our eight high-security
North American facilities are each certified by one or more of the Payment Card
Brands and Interac (in Canada), forming the largest network of certified production
facilities in North America. The Payment Card Brand certifications allow us
to produce cards bearing these brands and provide relevant card services for
our issuer customers. Additionally, many of our facilities are also certified
to be in compliance with the standards of the PCI Security Standards Council.
These certification processes are long, complex and costly, and our facilities
must comply with strict standards of security in order to obtain and retain
this designation, which are regularly verified by both the Payment Card Brands
and our customers.
Industry Experience and Proprietary and Patented Solutions. Over the course
of our long operating history, we have developed extensive technological, engineering
and operational expertise that we believe has made us a leader in our industry
for product and process know-how. We believe that our technological and operational
know-how, combined with our specific focus on the Financial Payment Card market,
gives us a competitive advantage and fosters a culture of innovation. We have
developed and acquired significant intellectual property over our operating
history and hold 19 U.S. patents, as well as 30 pending U.S. and foreign patent
applications, on our Financial Payment Card solutions, including patents on
our instant issuance offering, and patents on our tamper-evident security packaging
used by our customers that have Prepaid Debit Card offerings. We also hold exclusive
production rights to certain products the Company has developed, as well as
patented software solutions such as our MYCA™ offering, which is integrated
into the websites of over 300 card issuing banks and other customers.
Strong Management Team. We have built a strong management team led by Steven
Montross, our CEO and President. Mr. Montross has led CPI for seven years and
under his leadership we have completed three strategic acquisitions and we have
experienced significant growth. Our management team has established a track
record of recognizing and capitalizing on growth opportunities across the markets
we serve. Management identified and drove our expansion into Prepaid Debit Card
services during the early market adoption period of this card product. Similarly,
our management team devised and executed on a strategy to develop our card services
offering, which was accelerated by our acquisition of EFT Source.
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