Instant issuance allows banks to issue permanent debit or credit cards immediately at branch locations rather than through the mail. Steve Price of Australia’s ME Bank explains how banks can use this expedited solution to help customers cope with the impact of the pandemic
ME Bank, a direct bank, provides instant card issuance service to customers, allowing them to digitally access their new debit card the instant it is issued, instead of having to wait for their physical card to arrive by mail.
With customers avoiding cash payments, abandoning ATM withdrawals and flocking to contactless cards and digital wallets, instant card issuance has never been more important to retail banking. Here in Australia, as 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.
Cash withdrawals plummeted during lockdowns
Many of our customers are being told to stay at home whenever possible, must wear facemasks when they do leave home, and must shop – and bank – alone and unaccompanied. Thousands of workplaces have been forced to shut, and there are nightly curfews. This has had enormous realworld impacts on retail banking.
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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.
ME Bank is now one of only a handful of Australian banks supporting instant card issuance for both Apple Pay and Google Pay, which is far more convenient for both new and existing customers who previously waited days to receive a physical card by mail.
Luckily for ME, we were already a digitalonly branchless bank, which meant we were already well placed to reduce physical contact. I know many retail banks across the world with physical branches will be experiencing enormous adaptive change.
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.
The fear of virus transmission will remain with us for years to come
As retail bankers know, 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 do not have to leave isolation at home to replace a card. And, perhaps most importantly, it is a way for customers to avoid the postal delays that Covid-19 is imposing right across the world, including in Australia but perhaps most severely in the US.
The accelerated adoption of contactless payments and digital wallets like Apple Pay and Google Pay mean it is 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 will not 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.
Banks might lose ground by waiting to adopt the instant solution
There is a very real possibility that retail banks unable to instantly issue risk being left behind. Apart from instant issuance, what else should retail bankers be considering to support customers through contactless banking? Based on the Australian experience, I would suggest:
- Prioritise digital transformation and innovation at every customer touch point. It’s a safe assumption that the changes in banking brought about by Covid-19 are here to stay.
- Consider new ways to verify customer identification remotely and virtually, rather than in person and in branch. ME Bank was one of the first Australian retail banks to allow customers to verify personal loan and home loan applications remotely.