Cardholders are 22 percent more likely to be very-to-extremely satisfied with their bank if they have received an instantly issued debit card instead of a card sent by mail, according to a new Javelin study sponsored by Entrust Datacard.
The study also found that cardholders who receive their card instantly in a branch often start using it immediately, accruing between $0.50 to $0.77 in additional interchange revenue for their bank during the first month.
As consumer expectations for on-demand services rise, a growing number of banks and credit unions are shifting debit card distribution from mail delivery to instant issuance. The new study, “Instant-Issuance Payment Cards: Fulfilling Consumer Expectations for Immediacy,” provides insights into how banks can optimize their in-branch experience and build customer trust by offering instant card issuance services.
“While financial institutions traditionally focus on the monetary benefit of instant issuance, our research shows it can also empower them to address growing customer demand for immediate service – from opening a new account to replacing lost or stolen cards,” said Nick Holland, analyst for Javelin Strategy and the study’s lead author. “Notably, smaller institutions, such as community banks and credit unions, are leading adoption of instant issuance to gain a competitive advantage over their larger peers.”
Other key findings from the study include:
- Customers value the convenience of instant issuance and its halo effect extends to overall satisfaction with their bank. Instant-issuance customers are more likely to believe their bank is innovative (64 percent vs. 48 percent) and a great finance partner (57 percent vs. 45 percent).
- The satisfaction gap between banks with and without instant issuance is wider for customers replacing lost or stolen cards. Instant-issuance customers were 30 percent more likely to be very-to-extremely satisfied with their bank when replacing a lost or compromised card compared to those who received a centrally issued card by mail.
- Financial institutions can use the five to 15 minutes it takes to print a card in-branch to deepen customer relationships. Survey respondents reported that employees in their branches use this time to better understand customers’ individual needs and then cross-sell relevant products and services.
- Up to 40 percent of centrally issued debit cards are never activated, but activation may reach 100% for instantly issued cards. Executives at financial institutions placed activation rates at 60 percent to 70 percent for centrally issued cards while activation of instantly issued cards in-branch can reach up to 100 percent.
“A bank’s top priority is to attract and retain customers by offering convenient, secure service wherever consumers choose to transact,” said Ray Wizbowski, vice president of the financial market for Entrust Datacard. “Instant issuance can help banks win customer loyalty and boost their profitability by making their in-branch experience more meaningful. This capability is especially valuable when customers need immediate card replacements stemming from a lost card or if their cardholder data has been compromised.”