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 roster of credit unions. CFCU Community Credit Union will be one of the first credit unions to roll out this solution to its members, and it will be available for all other credit unions planning a platform deployment.

“Giving our members the best possible experience is our goal, said Jennifer Carlton-Cooper, Vice President of Electronic Services at CFCU Community Credit Union. “The platform is a great way to enable us to further expand member convenience with additional future capabilities, including issuing payment credentials directly to mobile wallets, Click to Pay, and card-on-file merchants. We can now tailor our services to meet members’ digital payment needs.”

Extending Beyond Digital Card Issuance

In addition to the greater levels of convenience offered by digital issuance, its benefits extend beyond the payments vertical. Financial institutions who are building their own digital strategies are thinking about more than just digital cards. When combined with a comprehensive mobile app, forward thinking FI’s could deliver a broader, but more cohesive user experience beyond just card procurement. There is no question the digital experience needs to be engaging to be successful. Offering additional services that complement the digital card can create the kind of stickiness financial institutions are seeking. Services such as subscription management, insights and spend analysis, debt reduction and credit score management, dispute processing and watching over fraud should all be part of the bigger picture. Consumers want logical workflows that carry them end to end through a challenge or experience.

Through deployment of a complete set of card-oriented services, banks and credit unions have a rare opportunity to become an influencer over the consumer’s behaviors and expectations for digital banking. Expansion of fintech partnerships and deployment of cloud-based platform solutions will lay the foundation for this positioning. The fintech marketplace is rich with opportunities to foster even deeper relationships with existing consumers while simultaneously attracting new ones, including the digital-only segment.

Instead of being stymied by business-as-usual, financial institutions that can quickly deploy fintech innovations like digital issuance will strengthen their competitive advantage while ensuring greater consumer satisfaction overall. Bringing innovation through strategic collaboration is a winning strategy for both financial institutions and the fintechs who provide these services. Ultimately, satisfied consumers win through a modern digital banking experience.

About the Author:
Dawn Sirras, Constellation’s SVP of Fintech Partnerships, holds over 17 years of experience in strategic and technology positions with credit unions – including 9 years as Chief Technology Officer for Georgia Corporate Credit Union. Dawn helps set credit unions and fintechs up for success. During her credit union years, she proved her strength in building partnerships by leading a product council of member credit unions in collaboratively leveraging their buying power and infrastructure.
Constellation has created the first open development platform dedicated to credit union and fintech app development. This patented, secure, and flexible cloud-based ecosystem provides credit unions and innovative app developers the ideal platform to deliver safe, reliable, and next-generation digital financial service experiences. Visit to learn about the latest innovations.

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