Fintech Insights

Card issuance strategy: Instant card issuance vs. digital card issuance

March 28, 2022

One of the first major lenders to introduce instant issue debit cards in their branches discontinued the program a few years ago citing the cost and customer preference toward mobile banking. Meanwhile, other major financial institutions continue to offer the service. In fact, 63% of the top 50 US banks and credit unions by asset size have adopted instant card issuance technology, according to a report from the Aite Group. That number is only expected to rise.

Divergent opinions regarding instant card issuance can be confusing for financial institutions that are considering whether to adopt an instant issuance program, continue one that is already in place or even add a digital issuance option. In this article, we’ll take a look at some of the nuances of the topic so you can make the right decision for your institution.

Benefits of instant issue debit card and instant issue credit cards

Instant issuance debit and credit cards have been an attractive offering for financial institutions for three primary reasons.

  1. Instant card issuance gives institutions a competitive edge by keeping pace with consumer demand for fast, convenient financial services. Research indicates that consumers appreciate instant card issuance options. A recent study revealed that the service influences their choice of financial institution for 36% of debit card users and 47% for ages 18-24 years.
  2. Many financial institutions view instant card issuance as a way to increase security and address fraud concerns by more quickly getting EMV chip cards into their cardholders’ hands. This can give an institution a significant competitive advantage since the majority of consumers (76%) view EMV chip cards as more secure. Additionally, instant issuance card programs remove one of the least secure areas of card issuance: mailing cards and PIN numbers.
  3. Instant issue debit cards and instant issue credit cards often allow financial institutions to position their card top-of-wallet and immediately start capturing interchange revenue. Studies show that eliminating the lag-time for account holders to receive their card in the mail and activate it leads to higher use and better performance. Instant card issuances result in 47% of cardholders using their card within eight hours. Over a 45-day period, instant issuance credit and debit cards outperformed mailed cards by 53%.

Benefits of digital card issuance

While a few years ago instant issuance was "table stakes” for many financial institutions, today, digital issuance is becoming more expected among consumers. According to the most recent Global Payments Report by Worldpay , globally, the use of mobile wallets exceeded cash for the first time for in-store payments.

It’s not a matter of digital card issuance replacing instant card issuance, or even about institutions needing to offer both solutions. Instead, it’s about two different demographics and two different strategies to complete a card issuing strategy. Every institution is going to have a demographic that won’t embrace the digital age; however, the ecosystem is changing, and new digital payment channels are growing with increasing adoption.

Which card issuance is right for your financial institution?

Meeting consumers’ expectations for secure and convenient access to their bank accounts and creating a positive experience for account holders are two of the most important considerations for all financial institutions. Whether instant issuance, digital issuance or other card issuance strategies are right for you institution depends on many factors. To learn more about your options and for expert guidance on the right path to take, contact us or your trusted payments provider.

Editor’s note: This article was originally published in July 2019. It has been updated for accuracy and consistency.