Instant Card Issue Gradually Gaining Ground Among Credit Unions

ENGLEWOOD, Colo. – Credit card issuing credit unions in Pennsylvania and North Carolina may soon be offered the chance to move their card issuing away from third-party processors and to begin instead issuing their ATM, debit and credit cards on site, according to Dynamic Solutions International, the company which developed the CardWizard instant card issuing system. Currently many third-party processors can take anywhere from three to 10 days to get new or replacement cards into the hands of credit union members, explained Ron Zanotti, vice president with DSI. “We thought that was too long,” Zanotti said, “and we saw an opening with current technology to offer a way to shorten it.” Currently, the company says that 140 credit unions use CardWizard with another 35 banks signing on as well. Recently the company opened two new offices, in Pittsburgh, Pennsylvania and Raleigh, North Carolina that house its direct sales force. CardWizard uses preprinted cards which have everything on them except for the cardholder’s name and the account information that is carried in the magnetic strips on the back of the cards. A credit union staff person then enters the necessary information to personalize the cards and the member can walk out with a new credit, debit or ATM cards within just a few minutes. Zanotti said the information can include a personal identification number that the member themselves can choose as well. The new idea has been catching on with credit unions, Zanotti said, pointing out that the company added 75 new financial institutions in 2004, a 50% higher growth rate than the year before. But one down side to the new system is price. At $10,000 per branch site, an instant issuing system can seem like an expensive proposition. But Zanotti countered that concern by pointing out that credit union members are becoming more used to fast routine card service, not less. “When placed against the cost of an ATM, for example, which can range into the tens of thousands of dollars, why not invest in the technology that can mean your member can start using that ATM in one day and not 10,” he asked. Zannotti acknowledged that steadily rising concerns about security could also dampen sales but said that bringing the card issuing process closer to the credit union actually helped reassure clients and the members. Visa and MasterCard have both issued guidelines for instant issuance that, Zanotti said, really encode basic common sense ideas like restricting which credit union employees have access to the machine and to the process and carefully tracking which employees issue cards. “The security question is fundamentally simpler because, in instant issuance, the liability for the card extends only to the credit union itself whereas a third-party processor has to handle card issuing for many different institutions,” Zanotti said. Zanotti also acknowledged that, in some cases, instant issuance has outstripped the card issuing technology. Credit unions which still exchange data with their card processors in batches at night will have to tell their members they cannot use their new cards until the next day after they issue them. “Until then, they just won’t be in the system,” Zanotti added. -