Instant Credit Card Issuance: The Complete Guide

In today’s fast-paced world, no one enjoys waiting for things. Most people want to buy items online and have them reach their homes within 24 hours or stream entertainment at any time of the day.

Speedy services have impacted every industry, including the financial sector. While it used to take days from when someone applied for a credit card to when they received it, many card issuers now issue cards to consumers immediately.

What Is Instant Card Issuance?

Instant card issuance is precisely what it sounds like. Instead of making someone who applies for a credit card wait days or weeks to receive the card, the card issuer provides it instantly.

There are a few ways issuers do this. One is to immediately provide a customer with a card number they can add to their mobile wallet or use to make purchases online. The Apple Card is one example of this type of card, letting you add the card to your Apple Wallet within seconds of being approved.

It’s also possible for card issuers to generate physical cards immediately and provide them to customers instantly. For example, if you apply for a credit card in-branch at a bank or a store, they can give the card to you immediately.

This technology can be used for credit or debit cards and is a great way to improve a customer’s experience by letting them avoid a long wait to get their new card. The cardholder also gets to skip an annoying activation process that involves sending credit cards via the mail.

All-in-all, instant issuance benefits consumers and the financial institutions issuing the cards.

Pros and Cons of Instant Issue Cards

Instant issuance is a great tool that can improve customer experience, but there are pros and cons to consider.

Pros

  • No waiting period: This is a benefit for cardholders because they don’t have to wait to receive the card before using it. For financial institutions, it means no waiting before the customer can start using the card to rack up a balance.

  • Immediate rewards: For cards with rewards, consumers can immediately earn cash back and make progress toward their welcome bonuses.

  • Customer service: Correcting issues with someone’s debit card by instantly issuing a new one can create a much better customer service experience than asking the customer to wait for a new card to arrive in the mail.

  • Higher levels of card use: Consumers who get a card through instant issuance make more transactions in the first 30 days of having the card than those who have to wait to use their account. The amount spent also increases. 

Cons

  • Cost: The technology to issue a payment card number that works within seconds costs money. If you’re issuing physical cards, you need a card printer to put the number on the card, add an EMV chip, add card personalization features, and more. This equipment costs money.

  • Support needs: Businesses need to have staff trained on the issuance software and hardware involved with instant issuance solutions so that they can offer technical support for the service.

  • Virtual card drawbacks: For consumers, it can be easier to overspend with a virtual card because they don’t have the physical feedback of handing over their cards to a cashier.

  • Risk: For card issuers, instant issuance increases risk. If malicious actors access the information and keys you use to generate card numbers, they could create functional cards without your knowledge or permission.

  • Complexity for users: Some credit card users prefer to use physical cards over digital wallets. Suppose you choose to use instant issuance to provide a card number that customers can use through a digital wallet. In that case, you’ll need to offer education for consumers who don’t use digital wallets frequently.

Industry Best Practices for Instant Issuance

Instant card issuance is an important technology that improves customer experience. However, it is essential to follow best practices when using instant issuance. Without these practices, card issuers may increase the possibility of fraud.

  • Nation-specific databases: Card issuers should store user data in centralized databases specific to each country and run applicant information against that database and other consumer information systems to reduce fraud and identity theft.

  • Device/individual tracking: Issuers should monitor the geographical location of applicants and the devices they use to block fraudulent applications from outside their typical region.

  • Base card numbers and fraud rules on issuance type: Card issuers can designate certain card number ranges for instantly-issued cards and others for other types of issuing. They can then apply different fraud rules based on how secure the card’s issuance type is.

  • Non-sequential card and CVV numbering: Card numbers should be non-sequential and sufficiently random to prevent enumeration attacks.

  • Spending controls: Issuers should place limits on newly instant-issue cards to prevent fraudsters from maxing out new credit lines they’ve obtained illegally. These controls could also block high-risk purchase types.

  • Authenticate the user before card activation: Cardholders’ identities should be confirmed before they can activate and use their new card.

The Evolution of Instant Issuance

Instant issuance of cards has become a more important tool for financial institutions over time. Noncash payment usage has increased steadily over the last two decades, making credit and debit cards a considerable part of the economy. 

According to data from Fiserv, in 2015, roughly one in five debit card users reported picking up their debit cards at a local branch of their bank or credit union. Instant issuance has only grown more popular since then for a variety of reasons.

For one, it’s simply easier to implement now. With the rise of digital wallets and virtual cards, it’s simple for card issuers to give a cardholder a virtual card number they can use to make purchases right away.

Another reason for the increase in popularity is that customers demand instant gratification, and financial institutions are happy to provide it. Instant issuance generally leads to more purchases on a card, meaning more revenue for the card issuer. When surveyed, 97% of consumers said they were satisfied with instant issuance, and 47% of instantly-issued cards were used within eight hours.

Bottom Line

In a world where people are demanding immediate satisfaction more than ever before, instant issuance is an essential tool for financial institutions and other card issuers to offer. Consumers benefit from having a card they can use immediately, while issuers can improve customer service and boost revenues through increased card usage.


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