Reimagining the role of digital issuance for Gen Z & digital natives
What does the average age of your membership, and more importantly the average age of new members mean for your card and payment strategy? Chances are your credit union’s member age continues to trend lower as younger consumers represent a growing share of your new member growth.
This new member growth trend means you’re attracting more Gen Z and digital natives, and in turn they expect different member experiences across account opening, account funding, payment experiences, and card and account management. Those different expectations can likely be summarized in three key points1
- Value speed and [near] real-time experiences
- Prefer digital engagement to in-branch or call center
- Want optionality and choice in the ways they pay
But it isn’t just you they are influencing per se … younger consumers are also impacting broader payment trends at scale.
Digital natives and broader payment trends
You might be surprised to learn that 9 out of 10 U.S. adults own a smartphone2, and this share is likely even higher among younger consumers. Penetration of smartphones influence eCommerce payment trends where we continue to see 8% YOY payment volume growth into 20243; double the growth rate of card present transactions.
But don’t count out their influence on card present transaction trends, either. Smart phone adoption has partly influenced tap to pay acceptance at retailers, where 80% of all in-person purchases in the U.S. made with a Visa card take place at a contactless-enabled merchant4.
Mass adoption of smartphones, wide-spread merchant acceptance of contactless payments, and a younger generation’s preference for speed and digital engagement on mobile devices make digital issuance an important feature for Gen Z and digital natives.
So how will digital issuance take shape within your card and payment strategy?
The digital provisioning journey to digital issuance
Push provisioning of payment credentials to digital wallets has been a long journey since wallets debuted in 2014, when you manually added your card details to the wallet on your smartphone. Manual wallet provisioning was followed shortly by In-App provisioning allowing credit unions to automate the manual steps of adding a card to a wallet from mobile banking apps. But these methods still required a physical card to first be issued, received by the cardholder, and activated before the card could be added to a wallet. For new members, this still meant having to wait up to 7 days before they could meaningfully engage with their new account, or a 7-day interruption to everyday spending behavior for existing members dealing with a card replacement scenario.
Digital issuance changes the order of card credential issuance. The evolution from push provisioning to digital issuance means a card payment credential is created, digitally activated, and pushed to a wallet ahead of a physical card even being in the production queue. New members benefit from a more immediate opportunity to engage with their new account, and the card credential can also be used to facilitate near-real-time account funding. An existing member needing a card replacement benefits from not having their everyday spending behavior interrupted; all of which translates into your credit union not losing engagement with an active member, and capturing card spend earlier than a 5-7 day wait for a physical card.
Digital issuance—Thinking beyond mobile banking
The most common approach to digital issuance is through mobile banking, partly due to the fact that mobile apps are on the same devices as the wallet that the digital credential will be pushed. It’s optimized to serve existing members and specifically those already engaged with your mobile app. But this approach also breaks the flow of the digital issuance step from the card and account opening experience which may have initiated on a separate platform. You’re also relying on your member to independently login to their mobile app to complete the digital issuance step on their own.
An untapped area for credit unions worth exploring are digital issuance solutions that support an omnichannel card approach, and are as optimized for new member and new account flows as much as for existing members engaged with your mobile banking app. Solutions using App Clips from Apple, or Instant Apps from Android can be added to your card or account opening workflow and can complement any speed of account or card opening experience. Best of all your credit union maintains control of when the digital issuance event is triggered which can help deliver a more holistic card and account opening experience for your members.
These solutions can also open opportunities to add near real-time card issuance capabilities to branches that aren’t designed for all the requirements for physical in-branch card issuance, and potentially at a fraction of the cost of physical card issuance solutions, too.
If you’re interested in exploring different ways Visa can support you with unique digital card issuance approaches, please reach out to your Visa Account Executive or visit our site to learn more.
1New Digital Consumer Study, Visa, 2020
2Americans’ Use of Mobile Technology and Home Broadband Survey, Pew Research Center, May-Sept. 2023
3Visa, Inc. Earnings Call Q122024
4VisaNet Data, May 2024
