Members Find Value In Cards Generated On The Fly

Instant issuance card programs are increasing physical card activation, usage, and member satisfaction.

In all aspects of consumers lives, one thing remains the same — time is precious. When shopping for a product or service, they want options wrapped up and ready to go the moment they decide.

Many credit unions are seeing this eagerness carry-over into financial services as well and have begun providing instant issuance cards to better meet the demands of busy members.

Instant issuance cards don’t have raised letters and numbers like traditional cards. They aren’t mailed out weeks after a member completes an application. Instead, the flat cards are printed within the course of a normal branch visit, and members walk out with an activated card that is ready to use.

University of Wisconsin Credit Union ($1.5B, Madison, WI) was the first cooperative financial institution in the state to offer instant issuance debit cards, beginning in October 2008. The credit union spent approximately $200,000 to buy and install instant issuance systems in its 20 branches and train its employees on the new issuance process.

We probably made that expense up within the first year, says Carma Atkinson, card programs manager at UWCU, citing savings in both cards and mailing costs. And we want our cards to be top of wallet.

The debit program was so successful that UWCU introduced instant credit cards in January of this year.

After the influx of positive feedback on instant debit cards, it just made sense to convert the credit card portfolio as well, Atkinson says.

To date, UWCU has provided approximately 200,000 instant issue debit cards. In the four months after the credit card rollout, the credit union issued 2,000 credit cards.

It’s great for the members to have immediate access to their funds, Atkinson says. Many members choose to customize their cards, and the credit union has multiple designs and colors available, including university based logos and Milwaukee themes.

Over the next three years, the credit union wants to convert all of its cardholder to instant issuance plastic. UWCU has plans to roll out instant issuance prepaid cards as well, but it has yet to determine if these will be one-time gift cards or reloadable cards.

In the neighboring state of Michigan, Service 1 Credit Union ($87.7, Muskegon, MI) has retailored its card services to provide instant issuance. The credit union started beta testing instant issuance debit cards in March 2010 and then purchased a machine of its own in 2011.

If you’re a credit union that doesn’t have instant issuance right now, you are at a disadvantage, says Jennifer Czarnopys, services coordinator at Service 1. Consumers are impatient and they want their cards now.

Besides member convenience, instant issuance cards hold myriad advantages for credit unions and members including saving time and money and enhancing security on the process and the product side.

New members are a prime instant issuance audience for Service 1 because these individuals can start purchasing as soon as they walk out of the branch.

There’s no chance for them to say, Maybe I’ll stick with my bank,’ Czarnopys says. The cards create an easier transition and as a result, the credit union has increased debit card transactions.

Czarnopys says instant issuance is also an easy way to get cards back in a member’s hands if the card is lost, broken, or stolen. If that happens, the credit union simply deactivates the original and has the member come in to have another card printed.

Czarnopys says Service 1 will probably transition its credit card portfolio to instant issuance in the next five years. But for now, it is focused on offering the debit instant issuance in all its branches, three of which are out of state.

Instant issuance is the future of printed cards, but there have been a few glitches with Service 1’s systems in terms of communication. Three internal systems have to be working together for the process to run smoothly. If one of those systems has a glitch, the whole communication line is broken and the credit union can’t print the cards immediately. But Czarnopys says the technology is getting better every day.

Consumers at Frankenmuth Credit Union ($240M, Frankenmuth, MI) are also satisfied with their credit union’s decision to offer instant issuance cards two years ago.

Our goal was to get the cards into the member’s hands so they could access their accounts immediately, says Debbie Bauer, consumer lending manager at Frankenmuth.

There is certainly a cost to introducing instant issuance. Frankenmuth bought its two printers for roughly $6,000 a piece. But the credit union has since cut its mail and PIN mailer costs substantially.

Today, she says, people are used to having debit cards. Members don’t always carry cash so when their card is lost or stolen it becomes a burden. But Frankenmuth’s members don’t have to worry anymore.

Most of Frankenmuth’s members are now using instant issue cards and some are even giving them sentimental value, customizing them with pictures of kids, grandkids, or pets. Bauer says in the credit union’s experience, more members will use a card that is customized.

It’s a good investment because you can get the card in the member’s hands right away, which is more convenient for them, Bauer says. And you can make interchange investment on that.

May 28, 2014

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