Coronavirus makes instant issuance a must-have for banks
With customers avoiding cash, abandoning ATM withdrawals and flocking to contactless cards and digital wallets, instant card issuance has never been more important to the payments sector.
Here in Australia, like in many parts of the globe, citizens are mandated to stay at home. My employer, ME Bank, is headquartered in Melbourne, the second largest city in Australia, where restrictions on movement are harshest because of a recent second-wave outbreak.
Many of our customers are being told to stay at home whenever possible, wear facemasks when they do leave home, and shop (and visit the bank) alone and unaccompanied. Thousands of workplaces have been forced to shut, and there are nightly curfews.
This has had enormous real-world impacts on retail banking. A good illustration is ATM withdrawals. Here at ME, withdrawals by our customers have roughly halved by volume since the start of the pandemic — and dropped by a third in terms of currency value.
Postal congestion has also increased as a result of COVID-19, slowing down card delivery. In this environment, instant issuance is a critical part of how a retail bank — especially a digital-led retail bank — can help customers.
What is fascinating from my vantage point here in Australia is being able to combine digital banking, contactless payments and digital wallets into a single service for customers that is extremely valuable amid the pandemic.
Instant issuance means simpler onboarding for new customers who can add a bank card immediately to their digital wallet the same day they open a new account. But what this also means for a retail bank in COVID-19 is that our credit and debit card holders can keep using Apple Pay and Google Pay even if their card is damaged, lost or stolen. They don’t have to leave mandated isolation at home to replace a card.
And, perhaps most important, it is a way for customers to avoid the postal delays that COVID-19 is imposing across the world, including in Australia but possibly more severely in the U.S.
The accelerated adoption of contactless payments and digital wallets like Apple Pay and Google Pay mean it’s a great time to be instant issuing.
And for the bank itself, having the ability to instantly issue a contactless card shortens the time it takes consumers to use their cards for first purchase.
I would predict that it won’t be too long before the majority of banks globally will instantly issue, driven by the practical need to reduce physical contact during the pandemic — and after, as no doubt the fear of virus transmission will echo for months and years.
There’s a very real possibility that retail banks unable to instantly issue cards will be at risk of being left behind.