This white paper explores payment innovations and the need for traditional banks and card issuers to reinvent their payment card programmes.
We investigate cardholders' preferences and expectations and detail the recipe for a successful modern card programme.
We finally give an overview of the latest in card issuing with the example of Thales D1, a new platform set to revolutionise card issuing and deliver an immediate, digital-first payment experience.
Here is a summary of the document.
The rise of a new normal in banking and payment
The multiple lockdowns imposed worldwide have boosted eCommerce sales and stimulated the consumers' appetite for new, secure and frictionless payment experiences for both at-stores and online purchases.
These trends amplify the consumption of financial services and challenge banks' core IT and legacy infrastructures.
There's more.
Fintechs have demonstrated remarkable agility in offering new services and experiences, as well as modern mobile application, putting the user in control of real-time, simple and very innovative services.
While this threatens market share across various areas, traditional players can identify successes and emerging market demands to adapt accordingly.
And modernisation of the payment card experience is no longer an option.
Let's zoom in and discover their preferred payment methods.
Download the report
EMV (debit/credit) cards and wallets are the favoured methods of payments
If we look at a 100 transactions sample of at-stores payments, we see that the decline of cash is offset by card and digital wallet payments (Worldpay).
Payments with EMV cards are not displaced by the mobile alternative. Physical and Digital cards are in fact very complementary to best address all purchase needs from cardholders. The noticeable trend is the move towards a cashless society.
Cardholders have new expectations
But the way consumers order, manage and use their physical payment cards is going through a digital revolution.
- The experience is now digital first: card ordering is immediate and performed exclusively via the bank's mobile app.
- The in-app virtual card can be pushed instantly into a digital wallet to perform NFC or QR proximity payments in-store or to complete online transactions using the PAN, expiration date and CVV.
The rise of digital wallets and the early transformations of mobile banking apps sketch the key aspects of a successful modern card programme.
It's an excellent opportunity for banks and card issuers who can expect their new card programmes to generate significant commercial benefits.
What are these benefits?
Recipe for a successful modern card programme
STEP #1: Deliver an enhanced UX
Ordering a card and managing its life cycle becomes super easy. The mobile app, available 24/7, will increase traffic and become a marketplace for service discovery.
STEP #2: Leverage marketing and branding
Marketing (to increase sales) and branding (to build loyalty) are strengthened via card design settings, order tracking, alerts and controls. Interactions between the bank and cardholders increase exponentially with the mobile channel.
STEP #3: Energise end-user engagement
End-user engagement, as measured by card acquisition and transaction volumes, increases by an estimated 10 to 15%. It's so easy to order new virtual and digital cards via mobile. Rewards and benefits opportunities, new services such as Click-to-Pay and payment by instalments will also stimulate online purchases.
STEP#4: Slash operating costs
Costs can be cut by up to 40% with fewer customer touchpoints. Card issuance is now self-initiated by the cardholder via mobile. The new card-issuing platform benefits from the scalability of the cloud and reduced costs compared with legacy IT systems. Digital delivery is faster, cheaper, and less prone to fraud, reaping additional savings.
Modern card programmes require a modern card-issuing platform
Card issuing is at the heart of every customer relationship.
The good news?
APIs!
APIs (Application Programming Interfaces) help banks create an internal and external ecosystem of new apps and services, opening the banking system to a new set of capabilities - in the card payments experience in particular.
Like an app store, banks can offer best-of-breed third-party solutions to benefit customers and gain more business. They can create specific innovative processes, products and services with customer-facing layers that set them apart in the market.
The anatomy of a modern card issuing platform: Thales D1 example
With the introduction of Thales D1, developers now have a card-issuing API that enables them to combine modern infrastructure elements with legacy systems and deliver a highly innovative mobile and web UX.
Good reading.