Elevating the digital payments experience

Eliminate the waiting time

Applying for a new or replacement card can be a painful experience if the issuer’s infrastructure is burdened by legacy processes, paper-based applications, and manual delays. A new credit card from a large issuer typically takes about 7–10 business days, while a replacement card takes anywhere from 3–7 days. This waiting time doesn’t bode well for younger consumers who prefer speed in service and delivery.

In this regard, digital card issuance is a meaningful solution, wherein a card is instantly issued in a mobile wallet or an app; of course, customers can also request a physical card if they’d prefer one in their tangible wallets. Consumers see value in instant digital issuance, with 44% of those surveyed selecting it as one of their top three functionalities.

Break free from the days of manually adding card details

Easy card integration goes hand in hand with digital issuance. Imagine consumers getting a digital card issued instantly but having to manually save their card details on all their go-to shopping apps, media streaming apps, yoga and meditation apps, food ordering apps, and mobile wallets—one at a time. Why can’t integration to third-party apps be more intuitive?

One-half of our surveyed customers would prefer the ease of automatically saving their cards on third-party apps and wallets over manually entering their payment details, even if it’s only for the first time. The ability to push the card directly to a wallet could provide immediate access and ability to spend funds, whether digitally or in person.

Issuers are taking note and starting with one-to-one integrations. American Express launched an app-to-app integration with PayPal in October 2021, which allows customers to directly save their Amex cards on PayPal with the click of a button. Payments modernization expedites this process and uses integration into APIs to allow issuers to connect with multiple third-party apps and wallets at scale. Unquestionably, data security is a baseline requirement underpinning such integrations.

Impress customers with smarter rewards

Who doesn’t like to be rewarded for loyalty? But while rewards have always played a significant role in the value proposition of credit cards—and more recently debit cards—adding a personalized touch can make customers feel special. Two-in-five surveyed customers would prefer personalized rewards over fixed rewards.

Legacy infrastructure can impede issuers’ ability to deliver on customers’ expectations on personalization. But payments modernization can allow customers to choose the rewards of their choice, whether it’s in the form of cashback, statement credits, shares, or cryptocurrency.

Moreover, the technology underpinning modern card issuing can enable incumbent issuers to automate the process of identifying customers’ favorite spending categories based on their shopping transactions. This way cardholders don’t have to worry about manually selecting their preferred rewards categories and can trust they will get rewarded for spending on categories most relevant to them.

Help consumers get better control over their finances

In our survey, one-in-five cardholders would prefer to have more control over their finances. In a digital world, the ability to dynamically set limits and alerts on transaction types, geolocations, and amounts could mitigate the risk of fraudulent card activity and make consumers feel in control of their spending and card debt. In addition, giving customers a clearer view of their spending could empower them to make better budgeting decisions and allow issuers to push more relevant insights on money management.

The entry of leading payment networks with their digital card programs is an encouraging validation to the trend. When Mastercard launched its Digital-First Card Program in 2019, it embarked on a journey to reposition digital credit cards from just a payment instrument to a means to better money management. To achieve its goal, the payment network has been onboarding several payment processors on its guidelines to digitize cardholders’ life cycle, from application and issuance to data reporting and controls. These processors, in turn, would work with interested card issuers to enable near-instant digital card issuance integrated with built-in controls on transaction limits and spending.

Give customers more choice to pay as they wish

US cardholders, especially younger consumers, are looking for choice and flexibility as core tenets of their payments experience. The growth of the BNPL industry is a testament to this expectation.

Over one-half of Gen Z and millennial cardholders in our survey used at least one BNPL product in the past year, more than double compared to Gen X and boomer BNPL users. Moreover, the use of BNPL options isn’t limited to consumers who don’t have access to credit or who don’t prefer to use credit cards. In our survey, 40% of customers who consider credit cards as their primary card have also used BNPL financing in the past year.

While many card issuers are entering the BNPL space by launching their separate offerings, some customers find a bundled product more appealing. One-fifth of our surveyed consumers would like the optionality to BNPL, pay instantly, or roll over the balance at a transaction level, and a card that bundles these funding options together in an integrated offering can give customers that choice.