Despite the heightened security that comes with EMV chips and tokenization, consumers remain worried about their personal data being exposed in a seemingly nonstop parade of breaches. This leads to many cardholders requesting a new card as a precaution, even if they have no evidence that they were directly affected by a particular breach.
“It’s less about their cards being compromised than seeing news about a major breach at a place where they shop,” said Rob Dixon, product director at CPI Card Group. “The customer wakes up and sees a report about a breach, and wants to have his or her card replaced quickly whether they are a victim or not.” Dixon did not say how many cards get replaced across the market because of this fear, but given the rising number of breaches and the attention these breaches receive, it’s likely this anxiety will be around for some time.
This trend may also drive the use of virtual cards, which can be reissued faster because they can arrive in an app. “Mobile wallets have struggled to take off over the last 10 years, but as they gain traction, consumers will want to get cards and they won’t want to go through the process of waiting for cards in the mail,” Dixon said.
CPI Card Group will expand and market technology over the next year that allows instant issuance of virtual cards, selling issuers on the benefit of making card accounts available for mobile app use within a few minutes. Virtual instant issuing is becoming more common as card makers adjust to a future that has a heavy emphasis on mobile, said Tiffani Montez, a senior analyst at Aite Group.. “They’re going to want to make sure they are creating a product that supports where the consumers are going to be,” she added.
There will still be a demand for traditional instant issuance of plastic cards. In general, the number of financial institutions that offer instant issuance is increasing, Montez said. She added that about 23% of institutions in the U.S. offered the service at the end of 2016, a number that’s expected to reach 55% by 2021.