With data hacks on the rise — both in frequency and scope — the process of replacing plastic is on the minds of financial institutions.
Traditionally, when a member reports a debit card as lost, stolen, or damaged, a credit union calls its card processor and the processor sends a new card to the member — usually within seven to 10 business days. However, it could take longer.
According to Kris Roberts, director of marketing at Financial Horizons Credit Union ($176.7M, Hawthorne, NV), it can take more than three weeks for members to receive a new card.
CU QUICK FACTS
Financial Horizons Credit Union
HQ: Hawthorne, NV
Data as of 06.30.17
12-MO SHARE GROWTH: 6.9%
12-MO LOAN GROWTH: 5.8%
Then upon receipt, cardholders must activate the card. That’s a long time and considerable inconvenience.
“If there is a compromise and somebody needs a card, we need something better for the member,” Roberts says.
That’s why Financial Horizons now offers instant issue debit cards.
In August 2017, the Nevada credit union joined the growing ranks of financial institutions — banks and credit unions — offering instant issue debit cards. Lake Trust Credit Union ($1.8B, Brighton, MI), has offered instant issue debit since 2013.
“The benefit is truly centered around the member experience,” says Jody Blaine, virtual solutions operation manager of Lake Trust.
Here, Roberts and Blaine discuss the ins and out of instant issue debit and offer six best practices to start a program.
No. 1: Know The Rules
Lake Trust rolled out its instant issue debit program with MasterCard in 2013, the year before Blaine joined the credit union.
MasterCard’s instant issue guidelines run more than 200 pages, Blaine says, and contain details of various ins and outs of the program. These rules are serious, too. Fail to comply, and MasterCard has the right to revoke instant issue privileges from the institution.
CU QUICK FACTS
Lake Trust Credit Union
HQ: Brighton, MI
Data as of 06.30.17
12-MO SHARE GROWTH: 4.9%
12-MO LOAN GROWTH: 3.7%
MasterCard requires dual control when signing for sent and received card stock at branches as well as transport by a white glove service like Brinks. The printer must reside in a locked room under camera surveillance. Another dual access system must be in place to print the cards. For added security, Lake Trust chains the printer to its station.
Two employees must be present for the counting of card stock at the opening and closing of each day. Otherwise, cards are locked in a safe. Additionally, a branch can have no more than 200 debit cards at any one time.
“Take the guidelines under the strongest consideration when forming your program,” Blaine advises.
For Lake Trust, its auditing team helped identify everything the credit union needed to do.
No. 2: Blank Debit Cards Are Dangerous
There’s good reason why card processor guidelines require FIs to coordinate several different operational standards at once. A lost blank debit card is a ticking time bomb.
If a blank card gets lost or stolen, a thief can create a fraudulent card and commit fraudulent transactions up to the total daily limit of the card for however many days until someone discovers the transactions.
“A blank debit card is more dangerous than a $100 bill,” Blaine says. “Once you spend the cash, it’s gone. But a card is potentially worth $2,500 a day times however many days.”
No. 3: Consider Instant Issue In Branch Design
More than one team within the credit union touches the instant issue program, Blaine says. So, teams that at first blush appear to have little influence over instant issue might need to demonstrate some ownership.
For example, branch design impacts instant issue compliance. Without branch-level compliance understanding, branch designers might create a location that makes following the guidelines difficult if not impossible.
“The people designing the locations don’t necessarily understand the implications of where the printer is,” the virtual solutions operation manager says. “The credit union needs to understand where the cameras need to be as well as other things. It’s more involved than plopping in a printer.”