As the evolution of self-service interactions grows, instant card issuance gives members a good reason to visit credit unions, which can then deliver securely-activated cards directly into their hands.

It also provides members with human contact while improving satisfaction and increasing the opportunity for credit unions to cross-sell other products and services – and boost revenue.

The Brookfield, Wis.-based Fiserv and Shakopee, Minn.-based Entrust Datacard provided a primer on how instant issuance card services help credit unions.

“Instant, convenient and on consumers' terms aren't just the driving forces for digital channels – they're also changing people's expectations for the physical branch,” a Fiserv report, “As the Branch Transforms, Immediate Card Delivery Offers Instant Satisfaction,” declared. “As the branch continues to evolve from transactional to high-touch service, instant card issuance is one of those services consumers will appreciate – and increasingly expect.”

Sharon Pazlar, director, output solutions for Fiserv, said, “We're already seeing the first indications that a mainstay in the branch of the future will be instant card issuance.” Forty-six percent of the top 50 U.S. banks and credit unions by asset size already adopted the technology, according to Mercator Advisory Group's “Instant Issuance of Debit Cards: The Newest Best Practice” report in May 2014.

Instant in-branch card issuance usually complements central card issuance, or mailed cards. Pazlar pointed out a mix of central and instant issuance creates a positive experience for accountholders and meets consumers' increasing expectations for immediacy.

Financial institutions often turn to instant issuance to stay ahead of the demand caused by competition and the ongoing EMV migration. It gives consumers instantaneous access to funds as well as the enhanced technology and security capabilities of EMV.

Likewise, an increase in data compromises and identity theft necessitates unscheduled card reissuances. “When people lose their debit cards, they can't put their lives on hold while they wait for a new card in the mail,” Pazlar said.

Credit unions also want to enhance the member experience. “Instant card issuance rises to that challenge, enabling a member to walk out of the branch with strengthened loyalty to the institution and an activated debit or credit card, including EMV,” Pazlar explained.

The average time to receive a card from most financial institutions is seven to 10 days for new starts and reissues. Among debit card users who received a new card, one in five picked up their card in a branch, according to Fiserv research.

Consumers who receive their card by mail don't always activate the card immediately. “That is all lost income opportunity. The financial benefit to the credit union is incremental interchange revenue, higher activation and usage rates,” Alyssa Arredondo, director financial vertical marketing at Entrust Datacard, noted. Cards that are not activated could also lead to a card compromise incident.

“That seven-day period often results in incremental interchange for financial institutions,” Arredondo pointed out. She added Entrust Datacard studies and customers validate this data.

Fiserv's consumer preferences research underscores the gap that exists between card receipt by mail and activation. Only 63% of respondents activated their debit card the day it arrived, with 22% doing so within a week and 9% taking a month or longer.

Being able to use the card instantly is a key benefit. “That means it's activated. It's ready to go,” Arredondo said. “That is seven days of transactions and interchange revenue that the financial institution is earning that they would otherwise not have earned because the member does not have the card in hand.”

Entrust Datacard also discovered those with instantly-issued cards use them more and have an overall higher activation rate than those who received them by mail.

A Fiserv study revealed instant issuances translate directly into 30% card use the first day and 70% use within five days. Over a 45-day period, instant issuance cards performed 53% higher than mailed cards.

Fiserv also looked at how consumers view instant card issuance. Several key trends emerged:

Among all millennials, 22% received their most recent card in a branch.
Forty-eight percent of all debit card users and 63% of millennial debit card users think it's important to receive debit cards in a local branch.
Credit union members adopted instant issuance for debit cards at slightly higher rates (25%) compared to bank customers (13%).

Branches are still relevant to all generations, including millennials, according to Fiserv research, with 44% of respondents preferring interactions in the physical branch. By generation, seniors led at 61%, with late boomers at 51%. Among credit card users, 44% said instant issuance would influence where they choose to bank.

Pazlar maintained instant issuance has been a catalyst for new account opening and branch transformation. “Mix in wireless technology that lets a teller with a tablet meet the cardholder in the lobby to open a new account or replace a card, and the experience of the evolving branch is complete.”

Fiserv, which provides a start to finish route, sees instant issuance as part of a branch transformation strategy and offers all the necessary components including processing capability for transactions, central and instant issuance, fraud prevention services such as the capability to turn the card on and off, and hardware such as card printers.

It also offers support for branch transformation through a desktop computer or tablet. The $159 million, Rochester, Minn.-based First Alliance Credit Union uses the tablet solution. Other Fiserv instant-issue credit union clients include Polish American Federal Credit Union (Troy, Mich., $115 million), Allied Federal Credit Union (Arlington, Texas, $92 million) and Med5 Federal Credit Union (Rapid City, S.D., $63 million).

With Entrust Datacard, which offers identity and secure transaction technologies, members can open a new account or replace a lost or stolen debit or credit card in a matter of minutes.

“Our roots of installations began with credit unions and the small community banks. They were looking to differentiate themselves from the larger financial institutions and felt that providing an exceptional member experience was one way to do that. Instant issuance fit right into that mold,” Arredondo said.

By giving cardholders immediate purchasing power, credit unions can increase member satisfaction and improve portfolio performance. Arredondo explained banks are very interested in the business case, “whereas credit unions are more focused on the member experience.”

Entrust Datacard noticed a majority of its credit union customers used instant issuance early on for just new accounts. But recently, it has seen more of a shift to both new account openings and emergency card replacement. “We have definitely seen an uptick in that,” Arredondo said.

Navy Federal Credit Union (Vienna, Va., $81.5 billion), Desert Schools Federal Credit Union (Phoenix, $4.3 billion) and Service Credit Union (Portsmouth, N.H., $3.2 billion) are the among Entrust Datacard's credit union clients.

For credit unions, adding instant issuance capabilities requires investment and coordination of resources, but can lead to increased revenue opportunities, such as attracting and retaining customers, improving member satisfaction, and cross-selling additional products and services, Pazlar held.

“It used to be a nice to have, it set you apart, but now there are more competitors, banks and credit unions doing instant issuance than ever before,” Arredondo said. “If you are a credit union not doing instant issuance, you are behind the eight ball. It is an experience more and more consumers are expecting now. It is no longer a nice-to-have, it's more of a must-have.”

Instant Insights /

Instant Issuance Slashes Fraud, Among Other Benefits

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