Smooth Hand Off: Instant Issue Can Be A Lifesaver In The Event Of A Data Breach

ENGLEWOOD, Calif. - It's no secret that instant issue of ATM and debit cards offers members one of the things they covet most: convenience. But in light of massive data breaches and large retailers such as TJ Maxx and even the Veterans Administration, industry experts told the Credit Union Journal that CUs should consider how owning their own card embossing machine can come to the rescue after a data incident.

United Heritage Credit Union in Austin, Texas has seven embossing machines in each branch location that have a walk-in lobby. United EVP Michael VerSchuur said the credit union first considered the purchases as strictly a member convenience. VerSchuur said debit cards are so prevalent now that it makes good financial sense to have the ability to issue a card on the spot.

"People are moving away even from cash. ATM transactions are down. It's a good feature and service," he said.

United Heritage's total investment for DCS Card Wizards was $135,260, or $16,908 per branch, with a total ROI in 15 months. VerSchuur said a recent data incident affected 2,000 United Heritage members who were contacted by phone or by mail. In addition to preventing members from having to wait the typical "seven to 10 days" for a new card to be mailed to them, owing an instant issue machine saved the credit union the associated mailing costs. VerSchuur said two branches had increased foot traffic for about a week and one teller or MSR was shifted to the locations to assist with new cards. "Members just stopped by at their convenience," he said.

VerSchuur said 99% of new United Heritage members opening checking account choose to get a debit card and nearly 70% activate them. Debit cards have come to occupy the first position in member's wallets," he said, and an in-house card embosser allows a member service representative to hand a new card over the desk to a new member. United Heritage is now developing new debit cards that feature local art work such as the Austin hill country or member photographs. VerSchuur also added that a card embosser saves yet more money as there is no mail to lost in transit or returned. "This takes that totally out of the picture," he said.

Dynamic Card Solutions VP Ron Zanotti said credit unions with card embossers can help reduce their risk exposure by quickly canceling a card that might have been subject to a data breach or identity theft, but also issuing a new card with the same speed. Zanotti can speak from personal experience after one of his credit cards was compromised just before a business trip. His card company cancelled the card first but didn't get a new card to him in time for his trip.

"It would've been nice to stop by and say here's the letter, I want a new one. If I only had one credit card it would've been a situation," he said. "Once you get tied to a debit card, if you don't have it, you really get thrown into a bind."

Zanotti said DCS is working with 350 credit unions now and added that having the ability to instantly issue cards goes a long way to soothe members already frustrated and angry about being told they might be a crime victim.

"Now the member says, 'hey, my credit union really has it together,'" he said.

Zanotti said credit unions will also be aided by card embossers as most U.S. financial institutions are making the effort to shift consumers from paper checks to plastic credit and debit cards.