Elevating the digital payments experience


Elevating the digital payments experience

Unlock deeper financial relationships through payments modernization

Consumers have come to expect digital-first experiences at every interaction. The card payments journey shouldn’t be the exception. Discover how five modern card issuing functionalities can help issuers reimagine the digital payments process to enhance customer experiences and loyalty, empower better money management, and deliver compounding value.

Building the case for payments modernization

In June 2019, Bank of America debuted its digital debit card in the United States, allowing customers to apply for a new or replacement card in its mobile banking app—getting it issued instantly in the app itself. Digitally issued cards give customers instant access to their funds for digital and contactless in-person payments and allow the issuer to address fraud associated with in-branch card issuance.

Nearly three years later, the COVID-19 pandemic has only strengthened the case for digital issuance across the industry. Digital card issuance is a natural extension of the convenient and instant access to funds that consumers have begun to expect. And according to Mastercard’s COVID Consumer Impact Tracker, 57% of respondents believe receiving and using digital cards over physical cards is a change that’s here to stay.

But digital issuance is only the first step. Modern card issuing, or payments modernization, is an open application programming interface (API) based approach to reimagining the card payments experience that not only supports instant digital issuance but can also facilitate smoother card integration with third-party programs. This integration can allow issuers to offer greater personalization and tighter spend controls to customers. Payments modernization can lay the groundwork for issuers to give consumers what they expect today while also positioning them to meet consumers’ latent needs, whether it’s their interest to buy now, pay later (BNPL) in installments, or earn crypto or stock rewards.

To test this hypothesis, we conducted a survey to explore consumers’ interest in payment features that can be powered by modern card issuing and its impact on their overall financial relationships. Our survey indicates that two-thirds of surveyed cardholders said they’d expand their relationship with an institution that invests in elevating their payments experience and their preferred features and functions.

Elevating the digital payments experience

About the survey

Deloitte conducted a consumer payments survey between August and September 2021 to gauge consumers’ interest in the experiences powered by a modern card issuing platform.The survey was fielded to 1,947 US banked or underbanked consumers by an independent research firm. In this report, we focus on four generations of consumers: Generation Z: ages 18–23; millennials: ages 24–39; Generation X: ages 40–55; baby boomers+: ages 56 and above. Younger respondents (Gen Z and millennials) comprised 60% of the sample. All data presented in this report is unweighted.

The survey and resulting report have been prepared in collaboration with Marqeta.

Giving a modern makeover to consumers’ card payment journey

Consumers have multiple touchpoints in their card payments experience, including application, onboarding, payment transactions, rewards accumulation and redemption, debt management, and chargebacks. While smartphones have digitized the way we pay, the touchpoints before and after the core payment transaction are prime for a digital makeover.

Using these touchpoints as prompts, we asked cardholders in our survey to choose their top three preferred functionalities that would elevate their overall digital payments experience. While the list is not meant to be comprehensive, it’s indicative of the desires of consumers that payments modernization can provide. A careful look at five functionalities in particular indicates that while all of them add value to the consumer digital payments journey individually, they can create much more powerful experiences when used together.

Creating value beyond cards can unlock deeper financial relationships

The core value of payments modernization is to build digital payment experiences that are simpler and more convenient. And institutions that ace this experience design and delivery can not only win customers’ trust but also strengthen loyalty. While the overarching ambition for issuers to expand their customer relationship beyond cards is not new, modern card issuing perhaps lends a fresh perspective to achieve the goal. In our survey, about two-thirds of customers agree they will expand product holding with the institution that elevates their overall experience by offering their preferred payments functionalities. Issuers have an exciting opportunity to elevate their role and meet customers’ broader financial needs. What key strategic considerations can help them seize it?

  • Strengthening customer-centricity to build seamless and intuitive experiences
  • Using creative marketing campaigns to educate customers on the modern functionalities and how they can make it easier for customers to manage money
  • Implementing laser-focused execution on top of existing technology stacks
  • Partnering with payment processors in the ecosystem who share the same overall goals
  • Integrating with different players in the ecosystem, including new merchants

Seize the opportunities that come with payments modernization

Issuers should strategically assess modern card issuing features that are of interest to consumers and collaborate with the right partners to bring those to market, both with agility and at scale. While some issuers may adopt a wait-and-watch approach, those with strategic acumen, technology foresight, and an execution mindset can seize the opportunity to empower their customers and strengthen loyalty.

If you’d like to learn more about modern card issuing and how your business can tap into its current opportunities, let’s chat.

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