The largest financial institutions are well on their way to issuing debit and credit cards with dual contact and contactless technology. Many smaller institutions have done so as well. Two such examples, as reported in Credit Union Times, shared their approach to contactless issuance and offered some advice to those just beginning to think about their plans.
While the financial justification wasn’t offered, one piece of advice which makes a lot of financial sense was combining a contactless issuance project with other initiatives:
“Going contactless” isn’t as easy as it sounds, though – for credit unions and other card issuers, adapting to the new technological ecosystem takes time, money, planning and the right people.
Going contactless is a project all its own, but for many credit unions, combining the move with other big efforts can make better strategic and financial sense.
PenFed’s move to contactless was part of a process to deal with expiring EMV chips, PenFed Vice President of Payment Strategy and Operations Brad Patterson told CU Times. “It was an end-of-life thing anyway, so we kind of had a hard pivot to make because we needed to certify a new chip on all of our products,” he explained.
For the Albuquerque, N.M.-based Nusenda Federal Credit Union, the move to contactless was part of a card conversion. “It was a perfect opportunity for us to go ahead and have to issue this technology, and that was mainly because we had to reissue cards as part of our card conversion,” Nusenda Chief Risk and Administrative Officer Tom Hagan said. Nusenda, which has $2.4 billion in assets and about 206,000 members, announced in June that it was issuing contactless credit cards.
These credit unions also reminded issues to consider and plan for the impact contactless can have to all the other integrated solutions and systems:
Credit unions also have to consider what other processes the move to contactless cards will affect. Nusenda’s contactless cards, for example, gave the credit union’s instant-issue machines a hard time due to small physical size differences, Hagan said.
“If you don’t adjust your instant-issue machines, maybe the color will come out different or the overlay won’t be perfectly set,” he explained. “Sometimes the quality is going to be different and the thickness of the card. Those small things can have an impact on your instant-issue machine.”
JJ Alcantar, who is vice president of card services at Nusenda, said there are a lot of other moving parts, too – especially if the credit union is juggling another project at the same time. “You’ve got your core processor. You’ve got your instant-issue vendor, your loan originating system – so all the different vendors integrating, which was probably the most significant struggle,” he said. “We had to go back and make some adjustments with our vendors.”
In total, these credit unions found that a contactless project from start to finish was a 120 to 160 day endeavor.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group