The Digital Card Issuance Opportunity
Our world is becoming more and more digitally inclusive by the moment. Consumers have flocked to ordering groceries and take out through digital channels. Employers are embracing digital workforces with Zoom meetings and Slack huddles becoming mainstays. The payments industry is no exception to this trend.
Consumers expect real-time, automated, easy transactions when it comes to purchasing and even receipt of payment cards.
While in-branch instant card issuance sought to address consumer demand for timely access to new cards, it still lacks the flexibility consumers desire for usability. Digital card issuance may just be the answer to not only close that gap but also present a unique opportunity to revolutionize the way members interact with their credit union.
What is Digital Issuance?
Differing from instant card issuance, where payment cards can be immediately issued to a consumer when they head into a branch, digital issuance removes the need for physical interaction by issuing a card’s credentials straight to the consumer’s mobile wallet or mobile banking app. The consumer has immediate access to the card to begin making purchases.
Benefits to Consumers
Beyond the obvious benefit of arming a consumer with a payment card immediately, digital cards can be readily loaded to mobile wallets, Click to Pay or card on file merchant programs, making it easier for the consumer to use that new card. In the U.S., digital wallets accounted for 29.8% of e-commerce transactions, according to a report by technology solutions provider, FIS. Globally, the report projected that digital wallets would make up 51.7% of e-commerce transactions by 2024.
While there is still plenty of room for growth in the digital wallet space, there is the potential for tremendous opportunity. By provisioning a digital card straight to Card on File programs for example, consumers avoid the tedious task of updating online subscription and recurring payment providers with new card details. This saves the consumer time and ensures payments and services continue uninterrupted.
In an era of increasing payments fraud, security also cannot be underweighted in the consumer’s eye. Digital issuance presents several added security benefits. Credentials are shared directly with the consumer, with no exchange of data through third party printers or processors. What’s more, when sent to the consumer, a digital card’s credentials are safely stored within a mobile wallet or the user’s digital banking app. As these services are typically secured by one or multiple authentication methods such as biometrics, username/password or step-up authentication, an additional layer of protection for the card is automatically enabled.
Push provisioning, the process by which a digital card is loaded into a consumer’s mobile wallet, leverages a process called tokenization to increase payment security at the transaction level. Tokenization replaces the sensitive card data with a unique, encrypted virtual payment code specific to each individual transaction. These payment tokens are not only more secure, but can be pushed to mobile wallets, third party merchants and ecommerce payment systems as well.
Benefits to Card Issuers
As if delighting the consumer by anticipating and meeting expectations for service delivery weren’t enough, digital issuance also presents a considerable time and cost savings for financial institutions. A process that previously involved multiple touchpoints, 10-14 days of handling and costly printing and shipping fees, is now automated and wrapped up in seconds.
Digital issuance also presents the added opportunity to make the financial institution top of wallet. Once credentials are received by the consumer, they can be automatically loaded to digital wallets without the hassle of scanning or keying in card numbers.
In fact, according to research by OnDot, cards which are issued to digital wallets are nearly 100% activated and 70% are used within five days, thereby preserving spend momentum. The same automated process can also be applied to Click to Pay and Card on File merchant programs. This opportunity to ensure activation and use of card within the first week, translates to increased interchange income for the financial institution for the long term.
Ciphertext Solutions, a fintech headquartered in New Jersey, has partnered with Raleigh-based Constellation Digital Partners to bring this service to its....-->
Our world is becoming more and more digitally inclusive by the moment. Consumers have flocked to ordering groceries and take out through digital channels. Employers are embracing digital workforces with Zoom meetings and Slack huddles becoming mainstays. The payments industry is no exception to this trend.
Consumers expect real-time, automated, easy transactions when it comes to purchasing and...