Nearly everyone has – at one time or another – experienced the inconvenience of replacing a lost, stolen or damaged debit or credit card. The hassle of contacting the card issuer and explaining the situation is difficult enough, but that is typically followed by the prolonged delivery time of the replacement card.
Within this circumstance, however, lies an opportunity for credit unions to truly shine with existing and potential members. With instant issuance systems, credit unions can produce and issue new or replacement cards for their members within minutes from inside the branch.
Many credit unions have only just begun to realize the new value proposition of instant issuance, including reduced expenses, increased member satisfaction and improved security. The significant improvement of instant issuance’s ROI in recent years now has many institutions reevaluating deployment of this unique solution.
Faster, Smaller, Cheaper
Advanced software capabilities now enable end-to-end issuance integrated to the core system and card processor. Many of these systems are “cloud” or Software as a Service (SaaS)-based, meaning there is little or no IT effort required by the institution.
Also, many embossing subsystems are becoming more durable and less expensive, opening the door to cost-effective issuance of both credit and debit cards. This is significant because the more cards a branch can issue, the stronger the ROI. While card embossing is not always a requirement (such as debit), embossing and tipping (applying silver or gold to the numbers) serves as an effective fraud deterrent and enhances the credit union’s branding on the card.
Additionally, with optional card carousels, credit unions can increase the variety of card types stored and issued to members, providing a number of different styles for debit and credit, as well as value, prestige, and small business cards.
Advanced print technology has also changed how credit unions now deploy instant issuance. The most common method of printing, “dye sublimation,” uses heat to transfer dye onto the card, then applies a clear overcoat to seal in the print. While dependable, this method has its drawbacks, including no edge-to-edge printing, poor color matching and typically low-quality print resolution.
In response, reverse-transfer printing technology has been developed to address these shortcomings. Reverse-transfer creates a mirror image of the card design on a thin film, and then uses heat and pressure to bond the film to the card, resulting in a sharp, accurate and durable card with a high quality image.
Embossing vs. Flat Cards
Historically, economics has limited most institutions to deploying flat debit cards, as embossing systems were too expensive and required more servicing. However, as hardware prices have decreased and issuing systems have become easier to manage and more dependable, embossing is now making more sense.
Unlike flat cards, embossed cards do not require dye sublimation printing, further reducing consumables costs. Embossing also increases the number of cards issued per branch, further enhancing the ROI. Additionally, members perceive embossed cards – even debit cards – as having greater prestige and increased security.
Build, Buy, or Rent
Because the institution uses an in-branch device to emboss, print and encode the cards, pricing for instant issuance systems is tied to both hardware and service components.
Many of today’s instant issuance providers offer the “cell phone” model, in which the institution signs a term contract in exchange for the provider’s hardware at no charge (though some providers require an upfront deposit to defray the device cost, typically ranging from $5,000 to $8,000).
Similarly, the service cost is often a combination of a monthly fee and a “per click” fee for each issued card. Providers offer different hardware options based on anticipated volumes, card types (flat, embossed or both) and number of pre-printed styles.
Providers themselves also vary, as some core system vendors also provide centralized account issuance and processing services, and today many of these vendors are increasing in-branch offerings. Some provide hardware and software services, including integration to the core and processor, while others sell the middle pieces outright and provide implementation services.
This third option may ultimately prove most cost-effective, assuming the credit union has the IT resources to own and manage the final product.
Stating the Case
For members, instant issuance means a faster, more convenient delivery of the same card product at the same price, and allows for immediate use. For credit unions, the proposition is manifold:
- Greater member loyalty and retention, as well as an enhanced brand versus traditional competitors;
- Additional fee income resulting from expedited issuance traditionally paid to the central issuer or processor;
- Additional transaction fees that credit unions forego by waiting for delivery of centrally-issued cards to members. As many as a third of branch-issued cards are used the same day they are issued;
As the popularity and sophistication of instant issuance technology continues to increase, credit unions have the opportunity to provide a desirable and differentiating service to their members. The ability to instantly issue credit and debit cards will not only increase operational efficiencies and profitability within the branches, but increase convenience for members, further increasing satisfaction and loyalty.
Glen Fossella is COO at CTS North America in Wixom, Mich.