Many small banks and credit unions today offer convenient, in-house instant card issuance to their customers to stand out from the pack. But the complexities associated with upgrading their programs to instantly issue more secure EMV chip cards may have banks questioning whether to continue offering the convenient service. Despite the costs, financial institutions should aim to keep instant issuance in play as part of their migration to EMV.
In addition to being a great differentiator for small institutions, instant card issuing also provides strong business benefits.
In October, a Javelin Strategy & Research study said instant issuance programs resulted in improved customer service, increased card activation and usage rates, and new opportunities for revenue generation.
However, the EMV migration adds new complexities for banks, as they will need to make some upgrades to their instant issuance programs for EMV chip cards. While this may seem daunting and possibly cost prohibitive, EMV chip technology doesn’t detract from the benefits the program provides, and should not deter banks from continuing to offer instant issuance.
To begin the transition to an EMV instant issuance program, it is important that banks first become aware of the complexities involved with the transition.
There are cryptographic functions that are essential to the authentication, verification and authorization capabilities enabled by EMV. In order to maintain instant issuance as an option, banks must upgrade their systems to support the specific data requirements of the chip card and its operating system.
To assist banks, the payment networks have developed specifications, operating requirements and recommendations tailored for issuers to manage risk factors specifically associated with EMV instant issuance.
There are also industry-supported best practices and implementation steps to help banks continue to experience the benefits of instant issuance through the EMV migration. A bank putting together its instant issuance transition plan should consider a three-phase implementation to get the program ready in three to four months.
Phase one: Organize suppliers and payments services partners while assessing costs and inventory requirements. This is also the time to pay attention to network security to help ensure risks are minimized, including reducing the likelihood of improperly personalized cards.
Phase two: Ensure all aspects of the chip card are working as planned. This can be achieved through a controlled pilot program to determine possible failure points. Areas of cardholder confusion can be addressed in customer-facing marketing materials, internal training materials and care center/branch scripting.
Phase three: Focus on implementation, configuration and maintenance of the instant issuance hardware and software, and make time to educate your consumers and employees.
Randy Vanderhoof is the director of the EMV Migration Forum. He can be reached on Twitter @EMVForum.