When debit, credit and pre-paid cards first made their mark on consumer spending habits, there was typically a several-day wait period before a person actually received his or her card. Financial institutions have worked to reduce that wait time, and now consumers have grown to expect their card to be ready immediately after applying for or requesting it.
Payments Leader even noted that not having the ability to give a consumer the card immediately could dissuade him or her from doing business with the institution. Therefore, it is in the credit union or other financial institution's best interest to adopt these capabilities so that new customers can walk out of the branch happy and with card in hand.
Some financial institutions may hesitate at this notion. Having the ability to issue completely compliant, ready-to-use cards isn't always as easy as it sounds. Since having these options technically converts the branch into a card production facility, additional audits and regulatory compliance rules are brought into question.
Hurdles to clear
The branch must keep its inventory of blank cards stocked at all times, but access to them must be under close watch. Staff needs to be trained to be able to properly make the cards for consumers. And bringing additional hardware and software to create the cards is necessary, though this often takes time, money and potentially some restructuring of the office.
In addition to these obstacles, the ability to issue EMV cards immediately becomes a bit more complicated. Branches that had previously been able to issue cards at a moment's notice now have to upgrade their systems and retrain employees. Plus, it's crucial that there are people who have a complete grasp on additional features including:
- Chip personalization
- EMV profile parameters
- EMV scripting
- EMV key management
Consumer demand
It has been nearly a year since the EMV liability shift and, though consumer sentiment may have been rocky at first, more are getting on board. Many of those consumers who have yet to receive their new chip-enabled cards are specifically requesting them. And it's no surprise that they want the cards right away.
Chris Chronis, director of product marketing and research, and output solutions at Fiserv wrote in a blog that more than 60 percent of consumers are aware that some financial institutions are able to issue them cards instantly, and more than one-third stated that instant issuance would sway them in their decision of who to bank with. This number increases to nearly half when looking at younger card holders, indicating that this trend will likely continue to grow among millennials and generation Z, when they begin to get their own cards.
Beyond those who want instant issuance, nearly half of all debit card users believe it is important to receive their cards in a branch specifically. Factoring for only millennials, that number jumps to 63 percent.
Credit union benefits
Granted the growing demand for instant issue debit, credit and prepaid cards, credit unions should be making efforts to be able to provide this service to members. Not only will it benefit the member, in that he or she is immediately able to access his or her funds through the card, but credit unions have a great deal of good to gain from it.
The first and most obvious way credit unions will benefit from instant issue is through member satisfaction. Offering this service is a great incentive for someone to stay with or switch to a credit union as opposed to a competitor that does not offer it. In fact, according to Credit Union Times, credit unions that offer it have 15 percent more debit card activation on new accounts.
Consumers who received their cards instantly also used them more: 20 percent more swipes and 20 percent higher debit card spend.
On the other hand, many consumers who receive debit cards through traditional mail don't bother to activate them. The credit union, therefore, lost time and money in printing the card and mailing it to the consumer.
"Operations in relation to debit cards have become much more efficient, inactive cards were reduced by over 75 percent, and we increased usage and interchange income by leaps and bounds," explained Bill Carhart, CEO of Oswego County FCU, according to Credit Union Times.
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