Today’s banks face new challenges adapting payment card offerings to consumer’s evolving lifestyles. Two areas in focus are consumer’s immediate need for new or replacement cards and their desire for speedy contactless transactions. As contactless payments continue to grow in popularity, banks are looking to prioritize instant issuance and contactless cards. Seeking a provider that can accomplish both in a quick and cost-effective manner will help to expedite the delivery of these key services to customers.
The Instant Issuance Advantage
From entertainment and shopping to dining and transportation, the on-demand economy is redefining what convenience means to consumers. As a result of this shift, financial institutions are evolving their customer experiences as well. Instant issuance is a strong way for banks to create such convenience and value for their customers, helping to drive branch transformation and enabling smaller institutions to compete with larger institutions.
On the consumer end, the idea of waiting to receive a new debit card in the mail can seem archaic, especially when compared to how quickly someone can hail an Uber or have dinner delivered to their home. Through instant issuance, financial institutions enable their branches to print and issue cards onsite and connect customers with instant purchasing power.
Beyond consumer convenience, instant issuance can also translate to more revenue for banks, and quality interaction time with customers. Instant issuance has been shown to positively impact debit activation rates with increases of 4-10 percent, depending on branch and customer demographics. Additionally, issuers see an average increase of 21 percent in monthly debit purchase transactions with instant issuance depending on the mix of new and existing cardholders receiving a new card – with the technology reflecting a savings of upwards of $1 per card in mail-related costs.
The Coming Rise of Contactless Cards
With consumers demanding a faster, frictionless experience at the point of sale, the shift towards contactless payments in the U.S. is picking up speed. Dual interface EMV® cards in particular are helping usher in a new era. These contactless cards are embedded with chip and antenna, enabling both contact transactions (inserted at payment terminals) and contactless transactions (waved or tapped at payment terminals).
The growing popularity of dual interface cards is significant – they are expected to account for 80 percent of total global contactless transactions in 2019. According to ABI Research, U.S. contactless card shipments will hit 173.5 million in 2021, a sizable increase over the 25.7 million shipments in 2016.
One of the major benefits of dual interface cards is they provide the security that comes with an EMV chip, even when cardholders wave or tap the card at the payment terminal. The level of acceptance for contactless payments internationally also adds to the appeal of dual interface cards among American consumers, who can enjoy a reliable way to pay when they travel to other countries. Dual interface cards also provide a consistent payment experience when compared to mobile, digital and other contactless payment formats. This helps provide consumers with a multitude of new, seamless ways to pay – whether they use a card, mobile device, wearable or other payment object.
Instant Issuance for a Contactless World
For banks, instant issuance is the innovation they need today – while dual interface cards represent the innovation they’ll need tomorrow. As tomorrow grows nearer, the choice for issuers shouldn’t be between one or the other but rather an ‘all of the above’ approach. The financial institutions who can deliver on both –instantly issuing contactless cards – will enjoy a slew of benefits.
For one, they will see the combined impact of the competitive differentiation instant issuance and dual interface cards bring, positioning themselves as technology leaders and appealing to tech-savvy consumers. From a financial perspective, the ability to instantly issue dual interface cards means seeing both the interchange revenue increase from putting cards in customers’ hands quickly and the added revenue potential that comes with top-of-wallet status – which contactless cards often enjoy due to their convenience, particularly for small-dollar transactions. All in all, the combination of instant issuance capabilities and dual interface cards are best-fit to meet the demands of today’s consumers, who want what they want in on-demand fashion and seek a seamless experience to boot.
While the advantages of instant contactless card issuance may seem obvious, the manner in which a bank goes about adopting the technology and expanding its card offering is critical. Any change that feels too complex or expensive to take on – particularly for smaller issuers – is usually a change that doesn’t always get around to being realized. This is why issuers must seek the right technology partner that can simply and cost-effectively provide them with an instant issuance solution, as well as the right payment solutions provider to equip them with best-in-class dual interface cards. Of course, the most ideal situation for financial institutions would be a sole provider who can offer them both.
Leaders in today’s payments space can make the adoption of instant issuance and dual interface cards straightforward and rewarding for financial institutions, removing all the headache from the process. By partnering with a company that provides fully-supported, SaaS-based instant issuance with plug-and-play capability, banks can quickly reap technology’s benefits with very little burden on their own resources and staff. With a new card issuance cycle on the horizon following the ongoing transition to EMV, an instant issuance provider that supports magnetic, EMV and contactless can be essential for issuers, especially when their cardholders are ready to upgrade to a dual interface card.
For dual interface cards in particular – the technology and design make a noteworthy difference. Providers that produce dual interface cards via air coupling technology, offer a number of chip-antenna combinations and a variety of design and finishing options that can help a bank differentiate its dual interface offering.
The unique advantage of having a technology partner that delivers both instant issuance and contactless cards is that – as a singular provider – they have the best view for managing an issuers’ card levels, regardless of whether the cards being utilized are blank or pre-printed stock from the system provider. Further strengthening the cumulative benefit of instant issuance and dual interface cards is a partner with strong design capabilities and high-definition printing technology that can help a bank utilize custom artwork or imagery that reflects the interests of the community it serves.
As the demand for instant issuance converges with the coming proliferation of contactless cards, it’s more important than ever that financial institutions establish their strategies to accommodate both trends and position themselves favorably in front of consumers. Selecting the right partner can help them achieve this cost-effectively and efficiently, which will be especially beneficial to smaller issuers. For financial institutions, obtaining evolved instant issuance capabilities is as critical as ever – the contactless era of payments will be taking off in the U.S. shortly.
Rob Dixon is Head of Product and Business Development for Card@Once at CPI Card Group, previously serving as Card@Once Product Manager at the company. Prior to joining CPI, Dixon held roles with NCR Corporation, Fiserv, Huntington National Bank and TSYS.