First it was music, then photos and watches, and now it’s payments. The smart phone continues to disrupt and reinvent how we go about our daily lives including how we pay for things. Great for consumers, but the side of the mobile device highway is littered with “Kodachromes” and “Walkmans”, so financial institutions (FIs) should take note. Rest assured physical cards are not going away anytime soon. The number of payment cards in circulation worldwide grew by 2 billion between 2019 and 2021 and is forecast to further increase. But digital cards are here to stay and oft preferred by the millennial cohort now entering their peak earning and spending years.
Digital cards have a lot of positives for FIs including minimized time to card activation, reduced issuance and customer service costs, and mitigated fraud risk thanks to tokenization. Then there’s the upside of increased cardholder engagement and revenues. Not surprisingly then, many FIs already offer or have plans to offer a digital card solution in the near future. But before jumping in with both feet, it’s important to understand the different digital card solution options, along with the relative merits of each.
The three primary digital card flavors for FIs to choose from are:
- Manual provisioning – where the FI enables consumers to manually provision their physical debit or credit card into an “xPay” mobile wallet (Apple Pay, Google Pay).
- Automated push provisioning from a standalone app – that ‘pushes’ payment credentials (based on a virtual and/or physical card) into an xPay wallet.
- In banking app payment enablement – which authorizes consumers to make payments directly within the FI’s mobile app, along with in-app value added features like card controls and transaction management.
The first option, manual provisioning, puts the onus on the consumer to follow a manual and error-prone multi-step provisioning process that can impede digital card adoption, compromising cardholder revenues. Option two, automated push and provisioning from a standalone app, removes this friction with automated push provisioning of payment credentials directly into the consumer’s mobile wallet for a great consumer experience. However, with both of these options the FI brand “disappears” into an xPay branded wallet (i.e., Apple Pay, Google Pay). This could leave the FI vulnerable to not only being disintermediated from their own clients, but also disintermediation by a new and aggressive competitive set.
Enter option 3 – in banking app payment enablement. This option delivers a superior consumer experience directly within the mobile banking app including Click-to-Pay, automated xPay provisioning, token management and card controls. Better yet, consumers have the ability to make payments directly within the mobile banking app, so no need for the FI to send their clients elsewhere! This is the power of the Entrust digital card solution.
Learn more about enabling seamless digital first payments with Entrust.