By: Denise Stevens, SVP, Chief Product and Digital Officer, PSCU
As our country turns a hopeful corner on the COVID-19 pandemic, consumer demand for digital experiences in their channels of choice has continued to increase. This has accelerated financial institutions’ plans for the digital transformation of products and services – including digital issuance, as consumers make an ever-larger percentage of purchases through e-commerce.
Digital issuance is the immediate creation of debit or credit card credentials from an issuer’s card management system that can then be push-provisioned into a cardholder’s universal payment wallet that the financial institution supports, such as Apple Pay or Google Pay. Once the card details are tokenized and securely provisioned within a wallet, the digital card can be used right away for purchases. Digital issuance allows cardholders to access their funds immediately if they have a new account or if their card is expired, lost, damaged or stolen. It also provides cardholders with their card details within the issuer’s mobile app so they can enter it online, in card-on-file apps and in other wallets. A physical plastic card is also sent to the cardholder to be used at all merchant locations.
The market has shown that it is ready to embrace digital issuance, with the use of digital payments becoming more and more mainstream. So, what is driving adoption?
Large financial institutions have introduced the service to millions of consumers, driving market expectations. As consumers transact via e-commerce with more frequency, they have become more comfortable using digital payments. While many providers now see digital issuance as part of the modern cardholder experience, financial institutions see it as a competitive differentiator and are encouraging more cards to be push-provisioned to universal apps to increase the level of tokenized transactions.
Advantages of Digital Issuance
In addition to providing financial institutions with a competitive edge, digital issuance offers several opportunities:
- Instant Access – Since digital issuance allows a card to be used immediately, a financial institution can avoid the standard five- to seven-day delivery time for a plastic card and encourage more transactions during that time on the existing account.
- Customer Loyalty – A financial institution can solve card issues immediately, impress cardholders with a superior service response, and avoid having a cardholder turn to another brand’s banking solution while their card is being replaced.
- Retailer Apps – There has been a major increase in retailer-specific apps which often have discounts or other user benefits attached. Cardholders who have received their card credentials through digital issuance at your financial institution can enter their information on apps for their favorite stores.
- Security – Fueled by the demand for contactless payment solutions as a result of the pandemic, research finds that 52% of consumers now believe that mobile payments are more secure than card payments. You can show your customers that your financial institution is committed to providing the most secure banking solutions by implementing digital issuance.
Implementing a Digital Issuance Strategy
Thinking of diving into the world of digital issuance? Consider following these steps to implementation:
- Think about the use cases for digital issuance. This includes events that create new and replacement card scenarios, like when a card is reissued after expiring or replaced after fraudulent charges are reported.
- Consider all the different channels that are applicable, including in-branch, through a contact center, automatically, online or through your mobile app.
- List out all the systems where there is interaction. This can include your core processing system, card management platform, teller system, digital systems and user interfaces.
- Plan the progression of your digital issuance rollout. Typically, financial institutions use an iterative process, choosing a use case or two as a starting point, gaining insight and then progressing with the remaining scenarios.
An ever-increasing number of cardholders trust digital payments and enjoy the convenience of purchasing goods through e-commerce. In order to compete, financial institutions must consider introducing digital issuance to create a great first impression and provide an excellent service response and member experience.
Mercator Advisory Group’s white paper, “Digital Issuance: Key to Any Digital Transformation Strategy,” sponsored by PSCU, provides credit unions with the information needed to promote the launch of digital issuance within their own organization and a high-level understanding of how to approach its integration. Download the full white paper today.
Denise Stevens is responsible for product management, new product development, digital experience and innovation at PSCU. Before returning to PSCU in 2015, Denise spent two years deepening her field knowledge of credit unions as Executive Vice President at PSCU Owner Vantage Credit Union in St. Louis. Prior to her tenure at the credit union, she spent seven years at PSCU, where she ultimately operated as the Vice President of Innovation & New Product Development. Denise’s career also includes roles as Business Leader at Mastercard, Paymentech and Equifax.