With consumers’ growing demand for instant payments, convenience, and immediacy, instant issuance just makes sense. Providing a personalized, on-demand, active debit and credit card that promotes top-of-wallet use as well as boosts security—instead of making consumers wait for their card to arrive in the mail—can be a game-changer. By offering this service, financial institutions are doing more to potentially help solidify a long-term relationship with their customers.
In a recent PaymentsJournal podcast, Rob Dixon, VP of Digital and Business Development at CPI, and Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, discuss what instant issuance is, why financial institutions should offer it, and why offering more sustainable options for customers is a forward-looking, strategic move.
What is Instant Issuance?
Instant issuance programs can help financial institutions gain a competitive edge, giving their customers instant access to their card of choice, thereby reducing incidences of lost cards and promoting increased spending. But what is instant issuance?
Dixon explains:
“Instant issuance really is the ability for a cardholder to walk into a branch or another facility and walk out with a fully capable card, being able to transact anywhere that the cardholder wants to.”
And it’s not just any run-of-the-mill card that these FIs are offering via instant issuance. Dixon said that many of the current instant issuance programs provide EMV or dual interface contactless cards, as well as a multitude of substrates (recycled plastic cards, traditional PVC, and some wood cards).
But as Riley points out, having an instant issuance program is more than just getting a card on demand.
“That card really reinforces the brand,” Riley said. “Getting into instant issuance is important because you’re really at the height of the relationship.
“This is your core contact with the customer, whether they’re opening an account of one sort or another. Having the ability to get that (card) right away really keeps the momentum of that relationship going.”
Why FIs Should Offer Instant Issuance
When FIs eliminate the lag time between issuance and the customer’s receipt and activation of their card, the customer is more likely to use the card sooner and more often. Consumers certainly appreciate this service, and it could influence a customer’s decision to bank with the FI in the first place.
“Instant issuance enables higher activation and utilization of that card for the cardholder,” Dixon said. “The cardholder is going to use that card more often, not only in the short term but in the long term. It’s also more likely that that card becomes top-of-wallet when it’s issued through an instant issuance program because that cardholder is transacting immediately.
“The higher activation utilization within the portfolio of cards is a significant benefit to the financial institution and could result in higher interchange revenue, as well as cost savings within the card program because you don’t have to mail the card.”
For FIs, it’s all about satisfying the immediate demands for customers to access their funds. Limiting or delaying that can cost FIs loyalty and trust.
On the issue of activation, Riley said, “You’re in that moment of truth where the customer wants the card, and if you can’t give it to them at the point that they want it, they’re going to use an alternative.”
“That could push that card back down deeply in the wallet,” he added. “So getting that (card) activated early is important—to start that muscle memory of the account being used for the transaction.”
Looking Ahead for FIs
With the tsunami of change and competition facing financial institutions amid a rapidly changing digital payments landscape, FIs must keep their finger on the pulse of consumer preferences to ensure they stay in the game. Where FIs leave gaps in customer demand, a fintech company is ready to scoop up market share with innovative solutions.
“It’s important that financial institutions support all channels of customer preference in all ways they can,” Dixon said. “It’s important not only to leverage instant issuance for some of the non-traditional issuance checkpoints like call centers but also that we start to support customer preferences and the instant issuance channel around digital as well and ensuring that card is top-of-wallet both in the physical wallet as well as the digital wallet, too.”
Long-Term Strategies
Consumers are increasingly concerned about the impact on the environment and are demanding more sustainable products from their financial institutions. This movement can be seen more prominently in Europe, especially in the United Kingdom. Financial Institutions should think about following suite as normally it’s only a matter of time before it’s adopted in the U.S.
“I think it’s important, as we move forward, to look at recycled products as the world continues to have sustainability initiatives emerge,” Dixon said. “As customers continue to look for sustainable options, it’s going to be important that you evaluate your options and your instant issuance program.
You have to support things like recycled plastic or recycled ocean-bound plastic types of cards or other eco-friendly options.”
Instant Issuance Should Be Table Stakes
Although some financial institutions are still debating whether to adopt an instant issuance program due to costs and the move toward mobile banking, it is still a highly sought-after program among customers. The selling point is that customers have a fast, convenient, and safe way to continue their daily transactions. FIs should consider the competitive advantage that could come with instant issuance.