Embracing the future of Card Issuance innovations

A customer’s worn-out debit card has just expired. Ordering a new card is the moment the customer has been dreading. Between the expected branch visits, identity verification and long delivery times for the replacement card, it’s a time sponge. That’s why digital-first customers are looking for a different experience.

If customers switched service providers, they could order a virtual card online and get almost instantaneous approval decisions through automated credit checks. The virtual card can be added to digital wallets like Apple Pay or Google Pay for instant use. The customer can set personalised spending limits, limit usage to specific merchant categories, receive transaction notifications, view transactions and make payments, all within the banking app or online portal. It’s the step-change that modern consumers expect, but not all banks work as fast.

Traditional card issuers are increasingly outpaced by nimble fintech competitors offering richer, more relevant features tailored to today’s digital-first customers. These fintechs, unburdened by legacy systems and hungry for market share, deliver seamless, personalised card experiences that resonate with modern consumers.

Banks are labouring under existing CMS platforms

Traditional Card Management Systems (CMS) were designed for a different banking era. However, it is complicated and costly to move on from them. These are the crossroads where traditional banks currently find themselves: either invest in vastly expensive and complex system overhauls or risk falling behind in the competitive landscape.

On the other side of the fence, fintechs and neobanks with no legacy systems are leveraging digital management tools for features like instant virtual card issuance, dynamic spending controls and seamless integration with digital wallets and have set a new standard in customer expectations.

The race is on. Speed, agility and customer-centric solutions are vital for the modern consumer. For established banks, this means embracing modernisation through technology upgrades.

Many traditional card issuers are turning to “Platformication”, a term the International Data Corporation (IDC) calls the “strategy of creating a modular, API-driven platform that can bridge the gap between legacy systems and modern fintech capabilities”. In short, it’s about achieving interoperability between old and new systems to scale and respond in real-time to loyal customers who won’t wait for their debit card to be produced and mailed.

Stanchion solutions offer interoperability

Platformication works with open, API-based platforms that allow smooth integration of various payment services. Instead of monolithic systems, platformification is built on modular architecture where different payment functionalities can be added or removed.

Stanchion offers precisely this solution through its Verto Payment Fabric. The result? More personalised and feature-rich payment experiences for customers. It also leads to greatly improved customer experience, cost efficiency and accelerated time to market.

Platformication allows financial institutions to quickly adapt to changing market conditions and customer needs by easily integrating new services or adjusting existing ones. Through its cutting-edge payment fabric overlay solutions, Stanchion enables banks to unlock new capabilities within their existing CMS without the need for disruptive and costly overhauls.

Emerging trends – virtual card issuance and management

Remember our debit card customer? An instantly generated virtual card could have given them the convenience of instant card issuance and dynamic spending controls for online shopping, subscription services or travel expenses.

It’s not only individual consumers who benefit. For businesses, virtual cards offer enhanced security by limiting the exposure of sensitive card information, reducing the risk of fraud. Virtual cards provide a flexible tool for managing expenses, with features like customisable spending limits and real-time transaction monitoring.

For businesses and consumers alike, the benefits of virtual card issuance are manifold. However, to capitalise on the advantages of virtual cards, banks need advanced card management systems that can efficiently handle both virtual and physical cards, ensuring seamless integration, robust security and high user satisfaction.

How can Stanchion help with virtual cards?

Stanchion’s flagship modular payment fabric solution, Verto CMS, smoothly integrates the management of both virtual and physical cards, allowing banks to deliver superior services to their customers while maintaining robust security and operational resilience.

Whether it’s beefing up its fraud prevention strategy, revving up time to market, or streamlining card issuance, Verto CMS plugs into legacy systems to make this a reality.

Tokenisation and security in card payments

Tokenisation is a must-have security technique that legacy CMS systems fail to provide. Tokenisation replaces sensitive payment information with a unique, random set of characters called a “token”. This enhances payment security and streamlines transactions with better data protection, thereby reducing fraud.

Individual consumers may not know the mechanics of tokenisation, but they benefit from improved customer experience through faster, more convenient payment methods. Tokenisation integrates seamlessly and safely with digital wallets and other payment technologies without sharing actual card details. When a consumer uses a mobile wallet like Apple Pay or Google Pay on their smartphone, tokenisation allows the transaction to be completed securely.

This is important because smartphones will continue to be the bedrock of our lives. The IDC recently reported that the worldwide smartphone market grew 9% in the second quarter of 2024, the fourth consecutive quarter of shipment growth. The means the number of potential mobile wallet end users just swelled by 25 million.

As smartphone technology continues to grow, driven by ever-increasing market competitiveness, end users find themselves wielding handheld devices capable of leveraging payment methods that are far faster than banks that still use legacy systems.

For businesses, tokenisation allows them to securely manage customer data across multiple channels, providing a more comprehensive view of customer-buying behaviours. It is PCI DSS compliant and can lead to higher authorisation rates, with some sources reporting an average increase of 4.6% for card-not-present transactions.

There are other benefits. For example, a recent Discover Global study revealed that virtual card usage is taking off with businesses in Asia-Pacific. Some two-thirds of businesses surveyed revealed a combination of improved transaction security, reduced risk, greater business efficiencies and improved expense reconciliation.

Stanchion and tokenisation

Stanchion is a leader in implementing tokenisation and securing card transactions. With a deep understanding of the evolving security landscape, Stanchion provides financial institutions with robust CMS-enabled tokenisation solutions designed to protect sensitive card information at every transaction stage.

Through tokenisation, banks and other financial entities can significantly reduce the risk of fraud and data breaches, ensuring their customers’ financial information remains secure in an increasingly digital world.

For organisations that have yet to deploy tokenisation, Stanchion works closely with them to assess their specific needs, educate them on the benefits and mechanics of tokenisation and develop a tailored strategy for efficient deployment.

Stanchion keeps up with new technologies

As a payment leader, Stanchion keeps up with these digital innovations. Verto CMS can effortlessly handle biometric checkout, enable emerging products like SoftPOS and deliver personalised, secure and flexible financial products that meet the demands of digital-first customers and businesses.

By empowering customers with greater control over their financial interactions, Stanchion helps banks compete with nimbler fintechs by keeping up with rapidly changing customer preferences. At the same time, banks can build stronger, more trusted relationships with their clients.

The bottom line

Not all customers want to order their debit cards the old way. Stanchion, through its innovative Verto Payment Fabric solutions, provides a powerful and efficient way for card issuers to bridge the gap between legacy systems and modern fintech capabilities. Through seamless integration of advanced features like instant virtual card issuance, dynamic spending controls and robust security protocols, Stanchion empowers banks to offer personalised, agile and secure payment experiences without costly overhauls.

To learn more about how the card issuing world is evolving and how Stanchion’s solutions, like payment fabric technology, can rapidly deliver new features with agility, set up a call with our experts today. Let Stanchion be your trusted partner in grabbing new opportunities and staying ahead in the competitive payments market.