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August 11, 2010

Instant issuance a key tactic for card issuers

Instant issuance technology is one of the key tactics card issuers are implementing to encourage greater use of debit cards, according to a study commissioned by US ATM network operator PULSE.

By Verdict Staff

Instant issuance technology is one of the key tactics card issuers are implementing to encourage greater use of debit cards, according to a study commissioned by US ATM network operator PULSE.

Instant issuance means consumers receive their card immediately in-branch when opening an account, a contrast to the traditional process of receiving it by post.

The 2010 Debit Issuer Study found that 35% of issuers offered instant issuance in either some or all of their branches last year, up from 28% in 2008. Additionally those institutions considering deployment of the technology increased to 36% last year, from 26% in 2008.

“Although instant issuance can result in higher issuing costs, financial institutions offering instant issuance can benefit from increased profitability, greater customer satisfaction and better security,” said Cindy Ballard, executive vice president of PULSE.

The study also reports that 72% of card issuers view improving the performance of their debit portfolios by making debit penetration, activation and usage a top priority this year.

PULSE claims that issuers are adopting a ‘back to basics’ approach in response to the recession, which includes focusing on acquiring new account holders and encouraging existing customers to use their cards for small ticket transactions.

Debit rewards programs are another focus for financial institutions this year. The study shows that 36% of issuers identified rewards programs as a growth opportunity. Some issuers surveyed believe that rewards programs increase overall debit volume, create a competitive differentiation and strengthen relationships with cardholders.

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