by Dr. Brad Paulson, Thor Engineering, ICMA Standards Representative

When implementing a card system, whether for access control, financial transactions, or identification, assessment of the relevant proprietary, local, national, and international standards is generally one of the first steps. Typically, compliance with ISO 7810 is expected if the card is intended for use with automated systems. If the card is personalized with bar codes, embossing, or magnetic stripes, ISO standards 15416 or 7811, or one of the proprietary magnetic stripe standards are generally referenced. Likewise, compliance with one of the ISO IC standards is expected when using contact or contactless smart cards. Unless the card is intended for international data interchange, ISO/IEC 7812 Identification cards – Identification of issuers, is commonly overlooked.

The International Standard ISO/IEC 7812 is prepared and maintained by Working Group 5 (WG5), Registration management group, of Joint Technical Committee ISO/IEC JTC1, Information technology, Subcommittee SC17, Identification cards and related devices, and is composed of two parts:

Part 1: Numbering system
Part 2: Application and registration procedures

The purpose of this standard is to specify a numbering system for the identification of issuers of identification cards used for international and/or inter-industry interchange, which also applies to financial transaction cards. The intent of the registration process is to uniquely identify card issuers, and thereby card users, to avoid confusion when the card is used in environments accessing multiple interchange systems.

For example, a popular South American department store set up a revolving credit card for their customers. Initially, it was a closed loop system, and, consequently, did not necessarily need to follow any outside standards. However, the card became a huge success and other merchants began to accept the card. Eventually, the retailer and the card were so successful that they were each sold independently – a South American bank bought the credit card portfolio and a United States retailer bought the stores.

Unfortunately, the retailer had originally issued cards starting with a 1, which are reserved for airlines in the ISO 7812 standard; even after the product expanded to other networks and was no longer in a closed loop system, card numbers starting with a 1 continued to be issued and remain in use today.

Thanks in part to the growth of Internet sales, airlines and retailers today share many of the same payment service providers. Consequently, the two numbering systems finally collided when UATP (Universal Air Travel Plan) cards began to show up in South America as a form of payment. The cost of correcting the initial oversight in global expansion of a small closed-loop system is staggering: UATP must deal with cards that are misidentified as a South American bank cards by airline ticket outlets; the bank owning the credit card portfolio must now apply for a valid issuer identification number (IIN), and reissue all of the cards; payment service providers must correct routing tables to correctly identify the financial transactions.

The 2005 Global Market Survey, presented at the 2006 ICMA Conference and Exposition, indicated the Latin American region was currently fourth (of five regions) in number of cards manufactured and third in the value of cards manufactured globally, exhibiting approximately 34% growth in the number of cards manufactured over the past two years. Unfortunately, of the 43 members of SC17, all are from the other four regions, Asia/Pacific, Europe, Middle East/Africa, and North America; there are no SC17 members from Latin America, which encompasses Central America, Mexico, and South America. Furthermore, the WG5 meetings are generally attended by less than 10 member countries, which may explain why the issuer identification standard can be overlooked. However, while not required, in the example, by applying for an issuer identification number at the inception of the South American retail program, or when the program expanded to include outside merchants, the resulting confusion could have been avoided.

Patrick Macy, Universal Air Travel Plan, 1301 Pennsylvania Avenue NW, Washington, D.C. 20004-1707 USA, is the current convener of JTC1/SC17 WG5, and can be reached by telephone at +1 (202) 626.4074 or by email at pmacy@uatp.com

Brad Paulson, Ph.D., is the ICMA Official Standards Representative and concurrently serves as principal and founder of Thor Engineering, a consulting company he started in 2001 to test and evaluate media and materials to determine failure modes and recommend material and process improvements. Views expressed here are his own. Questions? Contact Brad at Tpaulson@rconnect.com.