6 Tips To Offer Instant Issue Debit Cards

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.

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.

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.” 

No. 4: Instant Issue Doesn’t Have To Be Instant

Financial Horizon has four branches that stretch across northern Nevada. Not one is within an hour of another, which makes instant issuance of debit cards less about in-branch pickups — though some members do opt to do so — and more about speeding up the traditional replacement process.

The credit union allows members to order replacement cards over the phone or in a branch. It then prints, packages, and mails the card. Lake Trust does this, too. Roberts estimates turnaround time is two to three business days. For Lake Trust, that’s closer to five.

“We have members everywhere,” Roberts says. “Depending on where people live, mailing is a better option.”

No. 5: Troubleshooting Is An Early Fact Of Life

Financial Horizons uses Fiserv’s DNA for its core data processor, and when the credit union started exploring its instant issue debit project in February of 2017, Fiserv recommended HID Global’s TRISM program.

TRISM syncs with the credit union’s data and credit card processor nicely, Roberts says, but it’s still an additional program for which the credit union’s front-line staff has to account. 

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.

The credit union rolled out instant issuance to members in August 2017, and since then it has had several instances of user error in learning the new system — things like failing to verify certain information or accidentally updating expiration dates.

“The program is new to the staff,” Roberts says. “When you have three different programs talking to one another it can get confusing.”

No. 6: The Startup Cost Is High But Worth It

Instant issuance debit programs come with a significant startup cost, according to both Roberts and Blaine. Printers can run nearly $10,000, plus the cost of maintenance, licensing, and software. Then there’s the card stock and video cameras.

Despite this cost, the operational benefit shines bright. Credit unions retain more control over their card issuance and member experience.

“If you only offer a traditional card, you are at the mercy of your vendor,” Blaine says. “With instant issue, you can guarantee the card went in the mail by a certain day or give it to the member right now.”