Digital Cards Take Over: The Advantages of Going Digital
In the rapidly evolving world of finance, digital cards are becoming an increasingly popular choice for both consumers and businesses. These virtual alternatives to traditional physical cards offer several advantages that cater to the modern customer's needs.
First and foremost, digital cards provide instant delivery via email or mobile apps, eliminating the delays associated with physical cards. This feature is particularly beneficial in urgent situations or for rewards programs ([1],[3]).
Second, banks can save significantly on costs by eliminating production, shipping, and logistics expenses, as digital cards do not require physical materials or distribution ([1]). Furthermore, these cards contribute to sustainability efforts by eliminating plastic and paper waste, appealing to eco-conscious customers ([1],[3]).
Third, digital cards offer increased convenience and accessibility. Users can store digital cards in mobile wallets (Apple Pay, Google Pay), making quick contactless payments possible without the need for envelopes or plastic cards ([1],[4]).
Fourth, digital cards enable real-time tracking and security. Banks gain valuable insights into card activation, redemption, and usage, and can quickly reissue cards if lost (email deleted), enhancing security and customer service ([1],[4]).
Fifth, digital cards allow for personalization at scale. Customizable messaging, branding, and bulk issuance are possible, which physical cards cannot easily achieve due to manual handling ([1]).
Sixth, digital cards can integrate seamlessly with digital ecosystems. Virtual cards can integrate with accounting software and banking apps, streamlining expense management for businesses and customers ([4]).
Banks can leverage these advantages in several ways. For instance, they can facilitate faster customer onboarding by issuing virtual debit or credit cards instantly. They can also deliver rewards or promotional funds immediately via digital cards with personalized content ([4]).
Moreover, banks can reduce operational expenses by replacing physical card production. They can also improve customer engagement through real-time analytics and customizable card designs, allowing for targeted campaigns and tailored marketing ([4]).
Digital cards are particularly useful for remote and digital-first customers who prioritize mobile wallet payments or lack physical mailing addresses. They also offer flexible spending controls for business clients, making it easier to track and control expenditures through integrations and real-time monitoring ([4]).
However, banks should still consider physical cards where universal access, offline usability, and user familiarity are priorities, especially in regions with limited internet or smartphone penetration ([2]).
In the post-pandemic world, digital cards are expected to dominate card-not-present transactions, with roughly 30% of in-person transactions already being click-to-pay or digital wallet transactions, and this number expected to grow to over 50% in the next couple of years. The goal is to steer all card-related activities, including disputing transactions and engaging in rewards programs, towards digital management ([5]).
Digital platforms like Fiserv are playing a crucial role in this shift, leveraging neural networks, insights, and machine learning to fight fraud and accelerate customization, such as personalized offers based on geolocation ([6]). By unifying debit and credit accounts, these platforms make it easier for cardholders to do business with their issuer.
In conclusion, banks that embrace digital cards can enhance their service offerings, attract modern customers, and streamline operations. The future of banking lies in digital cards, offering instant access, cost efficiency, personalization, sustainability, and digital integration.
References:
[1] Digital Cards: The Future of Banking. (2021). Retrieved from https://www.fiserv.com/en/insights/articles/digital-cards-future-banking
[2] The Role of Physical Cards in a Digital World. (2021). Retrieved from https://www.fiserv.com/en/insights/articles/role-physical-cards-digital-world
[3] Why Digital Cards are the Future of Banking. (2021). Retrieved from https://www.forbes.com/sites/forbestechcouncil/2021/03/10/why-digital-cards-are-the-future-of-banking/?sh=6f6213f258a5
[4] The Benefits of Digital Cards for Banks and Customers. (2021). Retrieved from https://www.americanbanker.com/opinion/the-benefits-of-digital-cards-for-banks-and-customers
[5] The Rise of Digital Wallets and Contactless Payments. (2021). Retrieved from https://www.pymnts.com/news/retail-infrastructure/2021/the-rise-of-digital-wallets-and-contactless-payments/
[6] Fiserv's Technology in the Fight Against Fraud. (2021). Retrieved from https://www.fiserv.com/en/insights/articles/fiserv-technology-fight-fraud
Digital cards can enrich the lifestyle of modern customers by offering instant delivery, increased convenience, and real-time tracking, making day-to-day transactions smoother and more secure. Moreover, by adopting digital cards, banks can contribute to technology advancements, such as artificial intelligence and machine learning, helping to combat fraud and streamline operations.
