Instant card issuance is gaining popularity as a way for financial institutions to enhance the customer experience, gain competitive advantages, and generate additional revenue. The document discusses factors driving the adoption of instant issuance, its financial and customer experience benefits, and options for implementation including centralized issuance, temporary instant cards from card vaults, and in-branch hardware/software for personalized cards. Case studies show instant issuance increases activation rates, usage, and customer satisfaction compared to mail-delivered cards.

1. Point of View
Instant issuance is quickly gaining popularity in today’s card marketplace. Instant issue
cards are available from several national banks, as well as a growing number of smaller
community banks and credit unions. A number of factors are fueling this trend, including
the desire for an enhanced customer experience, competitive pressures, the need for
incremental revenue and the threat of disruption to the postal delivery system. As a
result, it is important for financial institutions to evaluate the option of adding instant card
issuance to complement their ongoing central card issuance business. Before deploying
instant issuance, it’s important for financial institutions to consider the market drivers and
thoroughly compare the available solutions.
In the short term, instant issuance may
help attract customers and ultimately be a
competitive advantage. However, in the longer
term, it may prove to become an expected
business practice.
Financial Impact
When evaluating the effectiveness of instant
card issuance, financial institutions are typically
focusing on increased revenue opportunities:
• Attracting new customers and retaining
existing customers
• Increasing activation rates
• Increasing card usage
• Gaining loyalty and top-of-wallet
• Cross-selling other products and services
While recent comprehensive and quantitative
research appears to be in short supply,
several individual studies demonstrate that
instant issuance has a positive impact on
financial performance.
Enhanced Customer Experience
Being able to instantly issue debit cards in
the branch creates a positive experience for
customers – saving time and avoiding a waiting
period of up to ten days for delivery by mail.
Instant issuance can also become the capstone
of the onboarding process, giving staff the
opportunity to more effectively explain card
features and benefits, encouraging immediate
and frequent usage and cross-selling other
products and services, such as online banking.
A Competitive Advantage
Financial institutions are working harder than ever
to differentiate themselves in the marketplace –
and looking for new products and services to
distinguish themselves from competitors, while
offering a superior customer experience.
Due to recent launches of instant issuance
programs by large issuers, interest across
the banking community appears to be
intensifying and financial institutions opting
to implement programs are often using an
aggressive marketing strategy.
The Role of Instant Card Issuance
in Customer Satisfaction and Use

2. A January 2011 Datacard Instant Issuance
case study of Desert Schools Federal Credit
Union in Phoenix, Arizona, detailed the credit
union’s use of instant issue cards. The credit
union has instantly issued more than 767,000
check cards, helping to boost credit union
membership and compete successfully in a
challenging marketplace. Among debit cards
instantly issued and active within 60 days
of account opening, nearly 30 percent were
used on the first day of account opening.
And, among these instantly issued debit
cards, nearly 70 percent were used within
the first five days of account opening,
whereas few mailed debit cards are used
within 10 days of account opening.
The ability to instantly issue debit cards at
the branch has become a key element of the
onboarding process for Desert Schools as it
complements member enrollment in other
services at account opening – online banking
and online bill payment, for example. Being
able to issue a card at the branch gives the
credit union staff the opportunity to explain
the advantages of card-based transactions.
While instant issuance transactions would
be expected to far surpass mailed cards
in the first ten days after account opening,
a more meaningful measurement is to
evaluate usage over 30, 60 or 90 days.
When evaluated over an 11-45 day period,
Bangor Savings Bank, located in Bangor,
Maine showed instant issuance cards
performing at a rate
53 percent higher
than mailed cards
with similar aging.
While metrics for activation rates and
transaction volumes can vary from one
financial institution to the next, few can argue
that there is a positive interaction that occurs
when a customer is handed a newly activated
card. The 2009 Mercator Advisory Group
report, “Instant Card issuing: The Good Idea
Makes a Come Back,” describes instant
card issuance as, “one way to capture the
attention of debit cardholders (and thereby
increase the value of the depository account)
as it serves to encourage the creation of a
personal connection between customers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Open Date 1 2 3 4 5
Activation Rate of Instant Issuance Debit Cards
3300%%
7700%%
Days Since Account Opening
Percent based upon all active cards used at point of sales within 60 days of account opening
Source: Datacard Instant Issuance Case Study, January 2011
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3. In April 2013, Mercator indicated that they
are getting regular inquiries from financial
institutions regarding instant issuance. More
issuers are moving toward instant issuance
than ever before. According to Mercator, the
primary reason is the competitive advantage
of being able to offer a card in the branch,
especially for lost or stolen card replacement.
A Fiserv Perspective
For financial institutions, determining whether
to provide instant card issuance – and how
– involves analyzing the costs and benefits
of the options available, in conjunction
with the services offered by their central
issuance bureaus, to strike a balance that
aligns with their business strategies. Careful
consideration should be given to the market
drivers, ROI, the financial institution’s branch
footprint, card volumes and the pros and cons
of the available solutions.
For financial institutions making the decision
to add instant issuance to their portfolio,
Fiserv recommends a dual approach to card
issuance – centrally issued cards for the
majority of a financial institution’s programs,
with an instant issue solution for new
accounts and lost or stolen card replacement.
Options to Meet Card Issuance Needs
Fiserv offers three options for card issuance,
with varying costs and benefits:
• Centrally issued personalized debit and
credit cards
• Non-personalized, temporary instant debit
cards issued in-branch
• Hardware, software and fulfillment to
instantly issue personalized debit and credit
cards in-branch
and their financial institutions.” The report
goes on to say “The proactive nature of this
service supports the continuing growth in
the debit card payments market by offering
the opportunity to better educate consumers
on the use of their card, immediately replace
lost/stolen cards, and potentially gain the
prized position of “front of wallet” through
personalized, unembossed cards.”
Mail Delivery of Cards
Financial institutions rely on the U.S.Postal
Service (USPS) to deliver debit and credit
cards to their customers quickly and
accurately. With potential USPS changes
to delivery schedules, destinations and
rates, financial institutions are looking at
ways to minimize the potential risk of mail
disruption. For cards, that includes in-branch
issuance of a temporary or permanent card,
which lets customers begin making
purchases immediately.
Instant Issue Market Trends
While Visa®
and MasterCard®
began
offering the option of issuing unembossed
credit and debit cards several years ago,
widespread adoption of instant issuance
did not occur. According to Mercator
Advisory Group’s 2009 study on instant card
issuing, there are two primary reasons why
more financial institutions did not jump on
board. First, adoption was largely limited
to the organizations whose core market
differentiator emphasized personalized
services, in addition to having in-branch
personnel to effectively implement the
program. Secondly, financial institutions
would have had to invest in the hardware/
software and risk mitigation efforts
necessary to manage their stock of cards
and insulate against fraud.
3Point of View

4. Centrally Issued, Personalized Secure Cards
The decision to continue to use centrally
issued, personalized secure cards enables
financial institutions to capitalize on the
highly efficient infrastructure of the central
issuance bureau. For financial institutions
looking to add instant issuance to their mix,
many prefer to maintain a central issuance
relationship for reissues and large volumes
of work, while selecting an instant issuance
solution for new account openings and lost
or stolen card replacement.
Temporary Instant Debit Cards
While non-personalized, non-secure cards
have been offered as ATM vault cards for
years, non-personalized secure cards are a
relatively recent offering in the marketplace,
providing a new alternative to the purchase
of instant issue hardware and software.
In late 2010, Visa and MasterCard began
allowing issuers to use a generic cardholder
identifier (such as “Valued Customer”) on
consumer debit cards, with an expiration date
not to exceed one year, paving the way for
temporary instant debit cards to be issued
in-branch. Temporary instant debit cards are
stored in a secure vault. Branch personnel
pull a card from the vault, enter the
information into the processing system and
hand the card to the customer. The card can
be used immediately to make purchases
until a fully personalized, permanent debit
card arrives in the mail from the central
issue bureau. With this solution, there is
no investment in hardware and software,
making it a low-cost, low-risk alternative.
Instant Issue Hardware and
Software Solution
Card personalization hardware and software
is used to issue permanent, personalized
cards in the branch. This solution provides the
option of issuing a full range of payment cards
– including ATM, debit, credit, EMV and photo
cards. While this solution offers significant
capabilities, it comes with a cost. The average
price of hardware, software, installation and
training is approximately $12,000 per branch,
with some systems costing as much as
$40,000. In addition, the costs associated
with plastic card stock, printing supplies,
ongoing maintenance, training, associate time,
ensuring additional security, and managing
card association certifications, must be
factored in. Lack of integration with the
processor’s card management system may
also result in the need for dual entry of card
information, requiring additional staff time.
Finding the Right Balance for Card Issuance
Many financial institutions are evaluating their
card program management and the option of
adding instant issuance of payment cards as
a way to satisfy and retain customers while
invigorating the performance of their mature
card portfolios. However, central issuance
through a personalization bureau for mass
reissuance will continue to be an integral part
of the card production and delivery strategy for
most financial institutions.
Fiserv is uniquely positioned to assist
clients through the business case analysis
and implementation of an instant issuance
solution. With thousands of financial institution
clients using its central issuance services,
Fiserv is experienced at integrating both
temporary instant debit cards and hardware
and software solutions, while working closely
with a financial institution’s EFT and account
processing providers. It’s important for
financial institutions to look carefully at the
costs and benefits of instant card issuance
and work with a partner who can help an
organization find the right balance to support
business needs and objectives.
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5. A Comparison of Solutions
Central
Issuance
Only
Central Issuance Plus
Temporary Instant
Debit Cards
Central Issuance Plus
Instant Issue
Hardware/Software
Card Types
Full-spectrum of card
options available –
embossed, unembossed,
debit, credit, prepaid,
EMV, and photo cards
Debit cards
Full-spectrum of card
options available –
embossed, unembossed,
debit, credit, prepaid,
EMV, and photo cards
Availability for
Use
Customers must wait to
receive personalized card
via mail and activate card
before use
Customers receive a
temporary, non-personalized
card in-branch that is
available for use
after activation
Customers receive a
permanent, personalized
card in-branch that is
available for use
after activation
Temporary or
Permanent
Card
Permanent card
Temporary card issued
in-branch, followed by
permanent card in the mail
Permanent card issued
in-branch
Branch Visit No Yes Yes
Marketing
Opportunities
Messaging on card carrier
and inserts
Opportunity for branch
personnel to explain card
benefits and cross-sell other
products and services in
branch when card is issued.
Messaging on card
carrier and inserts when
permanent card is mailed.
Opportunity for branch
personnel to explain card
benefits and
cross-sell other products
and services when
card is issued
Branch Staff
Resources
No resources required
Minimal resources required.
Some training, security
measures for vault
management and
card activation.
More extensive resources
required. Branch personnel
must be trained to use
software and hardware to
produce cards.
Managing
Stock
Stock is not held in branch
Pre-printed stock for
temporary cards must be
securely stored in branch
Branch personnel must
manage the risk
associated with
pre-printed stock inventory
Audits None None
Audits for in-branch
issuance required by
Visa or MasterCard
Cost
Economical production and
fulfillment through central
issuance bureau
Staff training, staff time,
temporary card stock,
outsourced production
and fulfillment of
permanent cards
Staff training, staff time,
hardware and software
(beginning at about
$12,000 per branch),
equipment maintenance
and service, ongoing
consumable supplies
5Point of View

6. Connect With Us
For more information on instant card
issuance solutions, contact an Account
Executive today at 866-963-4877 or
getsolutions@fiserv.com.
About the Author
Chris Chronis
Director of Market Management,
Output Solutions at Fiserv
Chris Chronis joined Fiserv in 2009 and his focus is market
and competitive intelligence and strategic planning. Prior
to joining Fiserv, Chris spent nearly 20 years in the financial
services industry and 12 years in the customer communications
management segment where he focused on competitive
intelligence, strategic planning and market and product
development. He has been quoted in various industry
publications including Bank Technology News, Insurance and
Technology, Securities Industry News, and Mutual Fund Market
News. He has provided numerous strategic briefings to leading
analyst firms including Gartner, Forrester, Mercator and IDC.
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