JPMorgan Chase's approach to instantly issued debit cards today seems like that of many other banks — it helps checking customers get cards faster. But its future plans for the technology suggest a more ambitious goal.
Whereas the instant issuance of debit cards is done primarily to serve new or existing checking customers, enabling the technology for newer types of products could make it easier for the bank to get customers to adopt them.
JPMorgan Chase announced this week that it will install instant-issue technology in 2,000 branches by the end of the year and another 800 next year. Its deployment of this technology makes it easier to use instant-issue tech with EMV chip cards, which are still uncommon in the U.S., and prepaid cards, which few major banks offer.
"The instant issue machines are EMV-capable today from a hardware perspective," says Chase spokeswoman Christine Holevas. "We will need to do a software upgrade before we can print EMV via instant issue, and that probably won't occur until late next year."
The bank intends to add instant issuing of Chase credit and Chase Liquid prepaid cards in the coming year, she adds.
JPMorgan Chase began issuing EMV chip-cards to U.S. residents last year. It is one of the few U.S. issuers to offer the secure card technology, which is more common overseas. It began offering a prepaid card this year.
Though some banks that offer instantly issued cards print them without embossing, JPMorgan Chase's instant debit cards will be embossed. The bank will offer instant cards in New York, Los Angeles and Chicago.
The technology for banks to instantly issue a payment card has been in place for several years, but Chase adds an interesting twist in saying it will be capable of issuing EMV cards in the future, says Adil Moussa, payments strategic marketing analyst at Omaha, Neb.-based Adil Consulting.
"The fast issuing of EMV cards could be very positive at a time when the bank will want their customers to have the new technology," Moussa says.
In the past, banks invested in the instant-issue technology to serve customers in an emergency situation because of lost cards, or for high net-worth customers who quickly need a payment card for a specific occasion or trip, Moussa adds.
"It's probably less costly for a consumer to have a card mailed, but more costly for the banks to mail it," Moussa says, noting that banks generally charge a fee for instant issuing to replace a lost card.
Small-business owners in need of a card specifically to purchase goods or services for the business would also benefit from instant-issue technology, says Scott Strumello of New York- and London-based Auriemma Consulting Group.
"Sometimes a business owner can't wait the five days it may take to get a card in the mail, so I can see where it could really help them in those cases," Strumello says.
Instant-issuing is a trend bank customers are likely to see gain momentum in the coming years, as banks contemplate the various outlets available for providing cards.
Better ATM Services allows its clients to offer Visa-branded prepaid cards via ATMs. Those cards are similar to paper-thin transit passes, the Mesa, Ariz.-based company said.
A recent study from Mercator Advisory Group and Total System Services Inc. indicates consumers prefer making payments with a debit card issued by their bank over any other available options.
JPMorgan Chase's approach to instant issuance makes this relationship even more personal by adding a design relating to the city where the card was issued.
"The customer getting the card in Chicago would have a photo of the Chicago skyline on it," Holevas says.