Indiana's Centier Bank has triggered a new source of payments volume by giving consumers new debit cards in three minutes.
"We are basically cutting the time a consumer can use a debit card form anywhere from a week or so to a very short time, generally when the leave the branch," says Jeremy Miller, regional vice president of the north region of the $2.23 billion-asset Centier Bank, which recently deployed technology in its branches to allow consumers to obtain debit cards on the spot.
In the first month since deployment, the bank, which issues Visa-branded debit cards, say its activation rate—or the percentage of users that use debit cards for transactions within a month—jumped to 87% from 74%.
At the same time, the time between issuance and use has drastically decreased—58% of consumers used instantly-issued debit cards within eight hours of leaving the branch, and of those users, the average one uses the card 93 minutes after receiving it.
"Prior to the deployment, the average consumer used their debit card in about eight to 12 business days," counting the six or seven days the card was in the mail, Miller says.
To obtain instant cards, consumers enter their PIN at a workstation that is present at 43 of the bank's 45 branches. The customer's data is transferred to EFT Source, where it's processed and converted into an encrypted print file that is sent back to the branch electronically. Card@Once, which is integrated with the bank's Computer Services (CSI) core platform, encodes the customer's data and prints the new debit card.
The card is immediately active and can be tested at an ATM in the branch. For existing debit card customers, the process takes about three minutes and is paperless. For new customers, the process takes about 12 minutes to accommodate paper forms and other onboarding tasks.
The blank cards are stored in a hopper at branches—each hopper holds about 50 cards, and is replaced every two to three weeks based on the average rate of card production. In April, the bank printed 1,562 debit cards via Card@Once.
Centier is starting with debit cards, and plans to add instant cards for business checking, health savings accounts and home equity lines of credit.
"With the other cards you have to change where the cards are stored on the printer, and we issue cards with different colors and designs," says Miller, who adds the volume of debit cards is currently higher than the other cards.
There's no market data that correlates between instant card issuance and heightened usage of cards, though the reverse correlation can be painful, says Alistair Newton, a research vice president for Gartner.
Banks "issue the cards and the customer then never uses the card or product," Newton says. "That's the worst possible outcome for the bank, as they have incurred all of the costs of onboarding the customer but will then generate little or no income. So the incentive to encourage the customer to start using card is strong."
The actual costs of deploying and maintaining an instant-issuance system at a branch can look expensive when compared to a remote, mail-led option, Newton says, adding "it needs a bank that can take a holistic view of the customer and recognize that they need to invest in the relationship upfront."
Centier is actually saving money via instant issuance, Miller says, noting shipping costs should decline by about $6,000 per year. The cost per card is also lower, or $2.49 for each instantly issued card compared to $3.13 for mailed cards.
Centier will also be able to accommodate EMV-chip cards as the U.S. migrates to that format, Miller says.
The EMV migration adds a few technology steps to in-branch card printing, but Gartner's Newton says EMV-chip cards increase the incentive for issuers to adopt in-branch card issuance. Chase, for example, is using instant issuance as part of its EMV migration strategy.