Instant Digital Issuance: An Overview With Critical First Touch Best Practices

Instant digital issuance (IDI) creates a pre-activated digital version of a new or reissued card before physical card delivery. These digital cards, available for immediate use in a digital wallet for online shopping, are highly popular with consumers, especially younger, tech-savvy cardholders.

The right customer communications for Instant Digital Issuance (IDI) can boost engagement and spend. Our card marketing experts have assembled an IDI overview with definitions and best practices for the critical first touch, including examples from Chase, SoFi, Venmo, Affirm, Bank of America and Chime.

1. Overview and Critical First Touch Best Practices May 2024 Instant digital issuance

2. Instant Digital Issuance 2 What is Instant Digital Issuance? Provides a pre-activated digital version of a new or reissued card for immediate use in a digital wallet for online shopping…all before physical card delivery. Referred to as Instant Digital Issuance (IDI) versus Traditional Digital Issuance or Instant Issuance with delivery of temporary plastic card in physical branch . 44% of cardholders say instant access – either digitally or in-person – elevates satisfaction 1 51% of consumers say that ease of adding card to wallet is a key required feature 1 70% of digitally issued cards are used within 5 days 1 Visa. https:// africa.visa.com /content/dam/VCOM/global/services/documents/instant-digital-issuance-best-practices-on-fraud- management.pdf 1. https:// www.fiserv.com / en /solutions/card-services/digital- issuance.html

3. Instant Digital Issuance 3 Cheat Sheet Push Provisioning Push provisioning of the card allows cardholders to click a button in the mobile banking app that “pushes” the card (token) to a digital wallet. 2 Card Tokenization T okenization intercepts card data and replaces it with a randomly generated string of numbers and letters. It replaces information like Jane Smith, account number 4567 8910 1112 1314, expiration date 10/2025, with a token like HX46YT794RG. 3 Virtual Card Number R andomly generated numbers from card I ssuer linked to a credit card account. Facilitates online shopping without giving stores actual card account number. V irtual card numbers support faster and more secure online shopping without the physical card. 4 2 https://experience.idemia.com/digital-first/push-provisioning/ 3 https://www.nerdwallet.com/article/credit-cards/credit-card-tokenization-explained 4 https:// www.capitalone.com /learn-grow/money-management/what-are-virtual-card-numbers /

4. Instant Digital Issuance 4 Why Instant Digita l Issuance? Good for Issuers… Helps establish brand as a leader in “the evolving digital landscape” Revenue driver Reduces costs Drives top of wallet (TOW) position Defends TOW position when card reissue is necessary Prevents interruption to card loyalty Good for Cardholders… Creates satisfaction by eliminating waiting for physical card Relevant for younger, tech-savvy cardholders Ability to spend sooner and more often (also benefiting Issuer) Secure solution, as card-not-present transactions are blocked https://www.paymentsjournal.com/fis-are-building-long-lasting-relationships-through-digital-card-programs/ https:// www.fiserv.com / en /insights/articles-and-blogs/ how-digital-card-issuance-drives-digital-engagement.html?appId =aemshelldigital-issuance-sales-sheet-0723.pdf The most sensitive chapters in the relationship between a cardholder and card issuer are those disruption events when the customer has to replace the card... That’s a vulnerable position for the consumer because if a replacement card isn’t received quickly, they’re likely to move on to a different form of payment—perhaps a competitive card in their wallet.” https:// www.paymentsjournal.com /fis-are-building-long-lasting-relationships-through-digital-card-programs/ “

5. Instant Digital Issuance 5 Best Practices: Critical First Touch Manage and control the cardholder experience, starting with an immediate “you are approved” or “replacement card is ready to use” email Focus on the primary message and mission : Add new/replacement card to top of wallet position immediately and use Consider an incentive Reference mechanics ....”through mobile app” Add additional key messages — Note “plastic on way” or “use card now” and reinforce security Reinforce rewards value prop, if relevant Disclose access only to a portion of approved credit line Use strong and repetitive call-to-action The days or weeks between acquisition and activation are high-stakes for banks. Industry average activation rates hover at only 57%, and the chances of activation go down each additional day the customer has to wait for the card to arrive in the mail.” Flybits : Managing the Cardholder Lifecycle. “

6. Credit Example Manages expectation regarding plastic delivery timing No distractions – suggests immediate use of card today One click away from adding new card to digital wallet – with clear CTA Discloses line of credit restrictions and how to avoid limitations on full LOC access 6 Simple and straightforward, email informs prospect of card approval with singular drive to wallet from mobile app. Best Practices: Critical First Touch Competiscan , Credit Card Onboarding, September 2023. 1 4 3 2

7. SoFi pushes new cardholder to add card to digital wallet ahead of plastic 100 reward points incentive, plus tout about how digital wallet transactions earn rewards, too SoFi directly asks: “Why not keep it at the top of your wallet?“ One click away from adding new card to d igital wallet – Apple or Google Pay – promotes app features with good use of personalized screen shot 7 Incentivize action now and capture top of wallet versus a heavier lift later in lifecycle communications. Best Practices: Critical First Touch Competiscan , Credit Card Onboarding, September 2023. Credit Example 1 4 3 2

8. Manages expectation regarding p lastic delivery No distractions – suggests immediate use of card today Rewards reinforcement suggests taking card for a spin to earn cash back Reminder about activating p lastic after received 8 Uses QR Code to push new cardholder to virtual card number in the app, start earning rewards Best Practices: Critical First Touch Competiscan , Credit Card Onboarding, September 2023. Credit Example 1 4 3 2

9. Manages expectation regarding longer than usual plastic delivery because of manufacturing issue Positive use of incentive (100 reward points) for digital wallet set up – could benefit from more prominence in email Card benefit list is long but relegated to below the fold 9 Good News/Bad News: Plastic delivery may take 2-3 weeks but “no need to wait to start shopping” Best Practices: Critical First Touch Competiscan , 2023 -2024. Credit Example 1 3 2

10. Subject line indicates “your card is ready” but email headline ”shop with an Affirm Card” may suggest this is addressing a prospective cardholder “Before you know” reference to card arrival is not the strongest push to immediate use of digital card (younger cardholder may not be aware of business as usual timeframes) “Check your purchasing power” neatly handles limitations on accessing full line of credit 10 Communication is effective and touches on key message, although edits to copy would strengthen push to wallet and clear up potential confusion that this is a card solicitation Best Practices: Critical First Touch Competiscan . Debit Card Marketing Trends, January 2024. Debit Example 1 3 2

11. Debit Example Good reinforcement of security of digital card and debit card in general “Get started right away” – although a key message – is too soft for the critical mission to get IDI in wallet now Iterative CTA (“Get started with debit...”) may be more effective when explicitly linked to digital wallet prior to activating plastic 11 Balances two key messages – “this is secure” and “digital card is ready to use now.” However, Tap to Pay (without physical card in hand) is best left to card carrier promotion. Best Practices: Critical First Touch Competiscan . Debit Card Marketing Trends, January 2024. 1 3 2

12. Instant Digital Issuance Manages expectation regarding plastic delivery – and helpfully flags delivery in a “bright green” envelope Clear push to digital wallet set up within Chime app One click away from a dding new card to d igital wallet – above the fold and clear CTA 12 Issuer avoids falling into messaging overload often seen in Early Month on Book communications. Clean, simple, effective! Best Practices: Critical First Touch Competiscan . Debit Card Marketing Trends, January 2024. Debit Example 1 3 2

13. Contact information Nicole Johnson Group Director 518.621.1600 [email protected]