Members can start using debit cards minutes after they open accounts at Desert Schools Federal Credit Union.
Thanks to instant card-issuance technology, "members can use their cards five to seven days sooner than if they'd waited to get them in the mail," said Jamie Conklin, senior director of marketing at the $2.4-billion CU.
Handing out debit cards on the spot fulfills a "significant member need," according to Susan Chesnut, senior director of Electronic Transaction Services at Desert Schools.
Members are increasingly turning to their debit cards, Chesnut continued. In fact, debit card transactions will outpace credit card transactions in the next two years, according to the 2004 Federal Reserve Payment Study.
"We want to be able to get cards into our members' hands as soon as they come in and open an account," explained Chesnut. "Members can walk out the door with a new card."
In contrast, users often fail to activate their accounts when they receive debit cards in the mail, according to Ron Zanotti, vice president of sales and marketing for Dynamic Card Solutions, a software developer.
"Visa and MasterCard's published statistic for activation and usage on debit cards is 59%," Zanotti explained. "With instant issuance, financial institutions can now issue and typically activate the card instantly, driving up activation. Since members can start using the card immediately after they leave the branch, chances are they will."
Desert Schools FCU is on track to instantly issue and activate 90,000 new and replacement debit cards this year, up from 70,000 in 2004, using Dynamic Card Solutions' instant issue and PIN selection platform, Chesnut said.
The largest CU in Arizona instantly issues cards for about 25% of the membership, Chesnut added. Members can get instant debit cards and PINs at 42 Desert Schools locations across the state.
Incremental Lift
In addition to the "incremental lift" in interchange income associated with members using the debit cards sooner, Chesnut said that when member service representatives issue cards on the spot, they also have the chance to make members more comfortable about using the cards and associated products and services.
"Instant issuance means we're doing education about how to use these cards and how to use them more," she said.
The CU is installing seven more instant issuance and PIN devices for the grand openings of seven branches this month, Chesnut said. Cards that are not instantly issued at Desert Schools FCU include ATM cash cards and the monthly reissue of expiring debit cards, she said.
Members with lost, damaged or stolen cards also like getting new cards instantly, she added. "We've improved service to our existing members."
Members used to have to wait two days while new cards were shipped overnight from the vendor. Then, members had to take the final step to change PINs before they could use the replacement cards.
The instant issuance technology "very easily" integrates with existing branch, host and network systems, said Tom Marlowe, director of Technical Operations at the 293,000-member CU.
"Dynamic Card Solutions had a well established interface with our host system," Marlowe explained.
"Dynamic Card Solutions software references the information in our host system to make the card," he continued. "And administration of the system is centralized. We can configure the software centrally from our main headquarters, so we don't have to drive around to our locations to maintain separate databases or separate security."
About 175 customers, 140 of which are credit unions, are using the Denver, Colo.-based Dynamic Card Solutions instant issuance and PIN software suite.
CUJ Resources
For info on this story:
* Desert Schools FCU www.desertschools.org
* Dynamic Card Solutions www.cardwizard-dsi.com
