Real-time is the reality of payments and underpins everything from how and when funds are sent and received, to how cards are replaced if lost are stolen. In response, Entrust Datacard VP, Ray Wizbowski, says bank branches are now honing in on instant card issuance to give consumers immediate access to fully personalized, activated cards. But even though consumers demand real-time answers and access to funds, they also expect “armor-like” protection in the age of increased data hacks. And, that, Wizbowski told PYMNTS, starts with a trusted identity, interweaved with the ability to make payments all delivered in real time.
So Entrust Datacard is in the instant card issuance business. How has technology changed what you do, how you do it and who you do it for?
RW: So instant issuance is an interesting topic that we’re hearing a lot about from our financial institutions as they look at making their branch presence a little more convenient and transforming that brand experience to have a positive customer experience as these customers come into the branch.
When you look at instant card issuance, we look at it from two vantage points. One is new account opening and client acquisition, so if someone comes into the branch, giving them the ability to get a fully personalized, fully activated debit or credit product when they leave. We found that provides such a positive experience that it creates top-of-wallet, and also allows for more transactions to actually happen on that particular product. When the customer then also faces the challenge of a lost, stolen or damaged card, they have a better experience by being able to go directly to a local branch and get that emergency card replaced with a fully activated permanent credit or debit card product at the branch level.
From a bank’s perspective, they’re reacting to their customers at the point of need – both at account opening and when they need to replace a card for whatever reason.
What kinds of things do your customers ask you about – and even demand – that they didn’t 5 or 10 years ago?
RW: Well, they demand a lot more these days. As you know, we’re living in an age that’s far more connected with a lot more need for instantaneous response. So if it were 10 years ago, some sort of instant anything would be a challenge. Back then, checks were still very prevalent especially in corporate accounts, and we’re seeing that at a continual decline. And mobile wasn’t even on the table 10 years ago.
Fast-forward to today, we have a very connected consumer base that is doing more and more of their activity online, and more activity via banking apps. Now they can’t understand banks that can’t give them instant payment products when they walk in. So if you lose your card and you have to wait two weeks for a replacement, or you’re walking into a bank and they pull out a card that doesn’t have your name on it – that doesn’t make sense anymore.
What’s changing is that consumers are really looking for real-time answers and access to financial products, and real-time access to their funds.
I would imagine that your business, which is very card centric, is being challenged by mobile and the move that everyone is making to digital. Delaware, for example, is experimenting with putting drivers licenses on the phone. What is mobile’s short- and long-term impact to your business?
RW: I think that mobile is an interesting area – we have heard a lot of financial institutions talking about it, especially with the advent of companies like Apple stepping in with Apple Pay. So mobile is a platform for doing other things – in that case, payments. Iowa I think has already gone down the path of putting a driver’s license on a mobile phone, but they still issue a physical credential. I think that’s what we’ll see for the near and medium term – companion products between mobile and physical credentials.
With the transition to EMV in the U.S. and globally, you have a drive toward digital-based transactions, but the infrastructure is not there to fully support those transactions. For example, if I want to go to an ATM, I still need a card to authenticate myself. If I want to go to a gas station and fill up my car, the liability shift for fuel stations doesn’t happen for another couple of years. So there are a lot of things that need to happen for the infrastructure to support a mobile ecosystem.
I absolutely think that mobility will play a significant role in both identity and payments this year and going forward. It’s undeniable that mobile will continue to change the way that we do just about everything in our lives.
At the same time, banks will continue to want that companion card to go along with the mobile platform. I see them working in tandem to support one another. But also, from a practicality standpoint, you never want to leave your customer in a place where they can’t make a transaction. So if they have a mobile phone and the reader isn’t capable of reading an NFC signal, or the battery is dead, or for whatever reason the mobile platform doesn’t work, having that other way to transact with a physical card is really important for the consumer. It also boosts consumer convenience and gives them the ability to make that transaction however they want to do it.
With the 2015 liability shift just around the corner, in your opinion, what are the biggest threats to EMV and why?
RW: I think the liability shift is not necessarily about a threat, but it’s more about enabling security for the consumers. EMV done the full way, with a chip and PIN based transaction, is a much more secure way for card-present transactions. It’s essentially introducing two-factor authentication, or two ways to identify who you are in the payments process.
We’re seeing that the initial step into EMV is more along the lines of chip and signature, so using the chip-based product to become accustomed to the dip as opposed to the swipe, but then being asked for a signature. It still stops short of fully introducing the security measures that are there.
As we continue to move toward the liability shift, we’ll see that financial institutions will continue to push these payments products out into the marketplace. What we have to be concerned about is, typically when we’ve seen a country move from a magstripe-based product and a chip-based product, the first thing that happens is that all the card-present fraud that was taking place on a unsecure magstripe moves into the e-commerce world.
So financial institutions need to ensure that, as this migration takes place, and as we know that fraud migration will take place through the online transaction, there are more ways to secure that online platform. Customers need to have more ways to identify themselves in a digital environment and conduct a digital transaction that’s just as secure as a physical one.
So are there certain types of cards, like gift cards, that will never migrate?
RW: I don’t think that gift cards will migrate unless there’s an upsell to the consumer. It doesn’t make a lot of sense, especially for a temporary gift card, to incur that cost. A gift card today costs maybe 10 cents to produce, and when you start introducing a chip into the card, there’s a significant cost that goes with it.
The reason you move to a chip-based product is for securing the transaction. If you’re giving a gift card that’s worth $10,000, maybe you’d want to go down that path, but that’s pretty rare. I don’t see gift card companies going down that path. It takes longer to produce, and you don’t necessarily need that security because it’s not necessarily tied back to a specific consumer that you’re trying to do business with.
There are some exceptions to that – there are General Purpose Reloadable (GPR) cards that people use more as a prepaid product as opposed to a gift card. There may be some movement in that space, where you’re essentially attracting the unbanked or under-banked population with a credit-like product that’s a prepaid card.
What kinds of innovations are on the horizon that will keep this part of the ecosystem both competitive and secure?
RW: When we look at the entire payments ecosystem, and we look at the identities ecosystem, I think that where the innovation will come is in the merging of the two. The ability and the need to identify somebody in a digital world – so for example, through a digital connection, the ability for you to know who I am and to validate that I am Ray Wizbowski – is something that becomes more and more important in this digital age.
As we connect to retailers and services online, the ability to introduce more security or a higher level of assurance of consumers’ identities will be critical to the ecosystem.
We’re taking a step in the right direction with EMV – it gives us a digital based credential that can be used in a digital world. Combining the secure identity foundation with the ability to do transactions on top of that is going to be critical.
That’s really why at Entrust Datacard we’ve come up with a new tagline for our company – “Trusted identities, secure transactions.” When we look at the innovation for the future, we believe it starts with a trusted identity – and there are all kinds of ways to secure that identity that also allow transactions to be secure.
VP of Financial Vertical Marketing at Entrust Datacard
For over 15 years, Ray Wizbowski has been helping shape and promote companies that specialize in security and payment innovation. Currently, Wizbowski leads Entrust Datacard’s global financial vertical marketing. Prior to Entrust Datacard, Wizbowski was the vice president of strategic marketing for Gemalto’s Security Business unit helping drive the convergence of security controls with online transactions. Prior to Gemalto, Wizbowski was the vice president and general manager of ForeScout technologies – a leading pioneer of network access control technology. Prior to ForeScout, Ray held senior business development and marketing positions at MetiLinx, Positio Investor and Public Relations and Action Foundation.
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