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1、Elevating the payments experience How modern card issuing can unlock deeper financial relationships with cardholdersContents Building the case for modern card issuing 3Giving a modern makeover to consumers card payments journey 4Creating value beyond cards can unlock a deeper financial relationship
2、7The time to act is now 9Endnotes 10 Contacts 11Elevating the payments experience Building the case for modern card issuing In June 2019,Bank of America debuted its digital debit card in the United States,allowing customers to apply for a new or replacement card in its mobile banking appgetting it i
3、ssued instantly in the app itself.1 Digitally issued cards gave customers instant access to their funds for digital and contactless in-person payments and allowed the issuer to address fraud associated with in-branch card issuance.2Nearly three years later,the COVID-19 pandemic has only strengthened
4、 the case for digital issuance across the industry.Consumers in all age cohorts have become more comfortable with digital-first experiences,whether its digital health,digital commerce,or digital payments.So why would they want to visit a branch or wait for days for their new debit or credit card to
5、arrive in the mail?Digital card issuance is a natural extension of the convenient and instant access to funds that consumers have begun to expect.And according to Mastercards COVID Consumer Impact Tracker,57%of respondents believe receiving and using digital cards over physical cards is a change tha
6、ts here to stay.3 About the surveyDeloitte conducted a consumer payments survey between August and September 2021 to gauge consumers interest in the experiences powered by a modern card issuing platform.The survey was fielded to 1,947 US banked or underbanked consumers by an independent research fir
7、m.In this report,we focus on four generations of consumers:Generation Z:ages 1823;millennials:ages 2439;Generation X:ages 4055;baby boomers+:ages 56 and above.4 Younger respondents(Gen Z and millennials)comprised 60%of the sample.All data presented in this report are unweighted.The survey and result
8、ing report have been prepared in collaboration with Marqeta.Elevating the payments experience 3But digital issuance is only the first step.Modern card issuing is an open application programming interface(API)based approach to reimagining the card payments experience that not only supports instant di
9、gital issuance but can also facilitate smoother card integration with third-party programs.This integration can allow issuers to offer greater personalization and tighter spend controls to customers.In essence,modern management can lay the groundwork for issuers to give consumers what they expect to
10、day while also positioning them to meet consumers latent needs,whether its their interest to buy now,pay later(BNPL)in installments,or earn crypto or stock rewards.To test this hypothesis,we conducted a survey to explore consumers interest in payment features that can be powered by modern card issui
11、ng and its impact on their overall financial relationships.Our survey indicates that two-thirds of surveyed cardholders would expand their relationship with an institution that invests in elevating their payments experience and their preferred features and functions.Elevating the payments experience
12、 The COVID-19 pandemic accelerated the use of digital payments in Americans day-to-day lives.When shopping in stores,consumers have been quick to use tap-and-go contactless payments.And the number of American using contactless mobile payment is expected to reach 125 million in 2025,up from 101.2 mil
13、lion in 2021.5 According to our survey,70%of cardholders used their smartphones to transfer money to another person and to shop at e-commerce websites or apps in the past year,and 60%of consumers used them to buy groceries.Interestingly,many of these e-commerce platforms have embedded payments in th
14、eir overall customer experience,where a default payment methodeither a card,an account,or a digital walletis stored on the platform for quicker one-click checkouts.For instance,Toast allows diners at its partnering restaurants to scan a QR code to order and pay directly from their smartphones,offeri
15、ng 75%faster checkout times.6 Some of the in-store experiences,such as those at Amazon Go,have eliminated checkout from consumers experience all together.7 The growth of digital and embedded payments suggests that the status of a customers primary card(i.e.,the card they use most often for their pay
16、ments)has become more coveted.After all,how many times do consumers change their top-of-wallet payment card stored on a food ordering or ride-hailing app?To win the primary card position,many issuers are competing on economic value by doling out unsolicited credit line increases and providing attrac
17、tive pricing structures and rewards.8 While this strategy has been effective,9 issuers can do more to create a differentiated value for their cardholders.Changing their lens from product to consumer can uncover several differentiation opportunities.Consumers have multiple touchpoints in their card p
18、ayments experience,including application,onboarding,payment transactions,rewards accumulation and redemption,debt management,and chargebacks.While smartphones have digitized the way we pay,the touchpoints before and after the core payment transaction are prime for a digital makeover by modern card i
19、ssuing.Using these touchpoints as prompts,we asked cardholders in our survey to choose their top three preferred functionalities that would elevate their overall payments experience(figure 1).While the list is not meant to be comprehensive,it is indicative of the desires of consumers that modern car
20、d issuing can fulfill.In this section,we will focus on five such functionalities.4Figure 1.Modern card issuing can elevate cardholders satisfaction with the overall payments experienceRank the top three most important features that would elevate your satisfaction with your payments experience(Percen
21、tages indicate respondents who selected a feature as one of their top three preferences)51%Easy card integration:Ease of pushing and saving the card directly in a digital wallet or any e-commerce website or appInstant card issuance:Instant access to an issued card,in-person or digitallyPersonalized
22、rewards:Personalized rewards aligned with your spending behavior in place of fixed rewardsAuto-redemption of rewards:Automatic application of your reward points to purchases,e.g.,airline miles automatically lowering the price of a plane ticket at time of purchaseFlexibilty in payments:Ability to sel
23、ect transactions to pay using BNPL,the ones to roll over,and the ones to pay offBudgeting:Insights on spending and dynamic spend controls to help manage financesSuperstore app:Ability to conduct multiple day-to-day transactions,such as manage investments,transfer money,shop for groceries,book a cab,
24、in a single appDaily accumulation:Daily crediting of reward points or cashbacks,in place of end-of-period creditingCrypto rewards:Ability to earn crypto-based rewardsDigital assets:Ability to buy cryptocurrenciesAdvice:Advice to invest and grow savings44%44%25%21%21%8%6%36%33%13%Modern issuanceEasie
25、r enablement by modern card issuingOther functionalitiesSource:Deloitte 2021 Consumer Payments SurveyGiving a modern makeover to consumers card payments journey Elevating the payments experience 5 Digital issuance:Eliminate the waiting timeApplying for a new or replacement card can be a painful expe
26、rience if the issuers infrastructure is burdened by legacy processes,paper-based applications,and manual delays.A new credit card from a large issuer typically takes about 710 business days,while a replacement card takes anywhere from 37 days.10 This waiting time doesnt bode well for younger consume
27、rs who prefer speed in service and delivery.In this regard,digital card issuance is a meaningful solution,wherein a card is instantly issued in a mobile wallet or an app;of course,customers can also request for a physical card if theyd prefer one in their tangible wallets.Consumers see value in inst
28、ant digital issuance,with 44%of those surveyed selecting it as one of their top three functionalities.In addition,one-in-six consumers in our survey got a digital card issued in the past year,and the majority of them agreed that:1)the card application and receiving process was very convenient;2)it i
29、mproved their overall impression of the card issuer and its security;and 3)they would recommend the issuer to their family and friends for this feature.Easy card integration:Break free from the days of manually adding card detailsEasy card integration goes hand in hand with digital issuance.Imagine
30、consumers getting a digital card issued instantly but having to manually save their card details on all their go-to shopping apps,media streaming apps,yoga and meditation apps,food ordering apps,and mobile walletsone at a time.Why cant integration to third-party apps be more intuitive?One-half of ou
31、r surveyed customers would prefer the ease of automatically saving their cards on third-party apps and wallets (figure 1)over manually entering their payment details,even if its only for the first time.The ability to push the card directly to a wallet could provide immediate access and ability to sp
32、end funds,whether digitally or in person.Issuers are taking note and starting with one-to-one integrations.American Express launched an app-to-app integration with PayPal in October 2021,which allows customers to directly save their Amex cards on PayPal with the click of a button.11 Modern card issu
33、ing expedites this process and uses integration into APIs to allow issuers to connect with multiple third-party apps and wallets at scale.12 Unquestionably,data security is a baseline requirement underpinning such integrations.Personalization:Impress customers with smarter rewardsWho doesnt like to
34、be rewarded for loyalty?But while rewards have always played a significant role in the value proposition of credit cardsand more recently debit cardsadding a personalized touch can make customers feel special.Two-in-five surveyed customers would prefer personalized rewards that account for their spe
35、nding behavior over fixed rewards.Legacy infrastructure can impede issuers ability to deliver on customers expectations on personalization.However,modern card issuing can allow customers to choose the rewards of their choice,whether its in the form of cashbacks,statement credits,shares,or cryptocurr
36、ency.Moreover,the technology underpinning modern card issuing can enable incumbent issuers to automate the process of identifying customers favorite spending categories based on their shopping transactions(which can reset every month).This way cardholders dont have to worry about manually selecting
37、their preferred rewards categories and can trust they will get rewarded for spending on categories most relevant to them.While some issuers have launched automated personalized rewards,13 they are largely exceptions to the rule.Budgeting:Help them get better control over their financesIn our survey,
38、one-in-five cardholders would prefer to have more control over their finances.In a digital world,the ability to dynamically set limits and alerts on transaction types,geolocations,and amounts could mitigate the risk of fraudulent card activity and make consumers feel in control over their spending a
39、nd card debt.In addition,giving customers a clearer view of their spending could empower them to make better budgeting decisions and allow issuers to push more relevant insights on money management.14The entry of leading payment networks with their digital card programs is an encouraging validation
40、to the trend.When Mastercard launched its Digital-First Card Program in 2019,it embarked on a journey to position digital credit cards from just a payment instrument to a means to better money management.15 To achieve its goal,the payment network has been onboarding several payment processors on its
41、 guidelines to digitize cardholders life cycle,from application and issuance to data reporting and controls.These processors,in turn,would work with interested card issuers to enable near-instant digital card issuance integrated with built-in controls on transaction limits and spending.Elevating the
42、 payments experience 6 Flexible payments:Give them more choice to pay as they wishUS cardholders,especially younger consumers,are looking for choice and flexibility as the core tenets of their payments experience.The growth of the BNPL industry is a testament to this expectation.Over one-half of Gen
43、 Z and millennial cardholders in our survey used at least one BNPL product in the past year,more than double compared to Gen X and boomer BNPL users.Moreover,the use of BNPL options is not limited to consumers who dont have access to credit or who dont prefer to use credit cards.In our survey,40%of
44、customers who consider credit cards as their primary card have also used BNPL financing in the past year.While many card issuers are entering the BNPL space by launching their separate offerings,16 some customers can find a bundled product more appealing.One-fifth of our surveyed consumers would lik
45、e the optionality to BNPL,pay instantly,or roll over the balance at a transaction level,and a card that bundles these funding options together in an integrated offering can give customers that choice.With its flexible APIs,modern card issuing can allow issuers to layer BNPL offering on a digital car
46、d solution with ease.Delivering value:The whole is greater than the sum of its partsA careful look at these functionalities indicates that while all of them add value to the consumer payments journey individually,they can create much more powerful experiences when used together.This is especially tr
47、ue for Amanda,a fictitious 22-year-old student who is applying for her first credit card(figure 2).Figure 2.Creating powerful experiences with modern card issuingAmanda is a 22-year-old law graduate12345EASY INTEGRATIONShe embeds the card with her mobile wallet and preferred apps with a click of a b
48、utton and starts shopping at her favorite e-commerce app right awayCONTROLShe sets limits to manage her spending and receives advice on managing her card debt to minimize interestShe applies for her first credit card,which she gets issued(near)instantly digitally in her banks mobile appDIGITAL ISSUA
49、NCEShe is a fitness enthusiast and earns cash back to stay on top of her physical well-being goals and crypto rewards when she pays for her yoga and gym subscriptionsREWARDSShe frequently uses BNPL optionality on her card to break out her monthly grocery expenses and plans to roll over travel expens
50、esFLEXIBILITYSource:Deloitte analysisElevating the payments experience 7The core value of modern card issuing is to build payment experiences that are simpler and more convenient.And institutions that ace this experience design and delivery can not only win customers trust but also strengthen loyalt
51、y(figure 3).While the overarching ambition for issuers to expand their customer relationship beyond cards is not new,modern card issuing perhaps lends a fresh perspective to achieve the goal.In our survey,about two-thirds of customers agree17 that they will expand product holding with the institutio
52、n that elevates their overall experience by offering their preferred payments functionalities(covered in figure 1).Creating value beyond cards can unlock a deeper financial relationshipAmong those interested in a broader financial relationship,two-thirds of customers surveyed indicated they would ha
53、ve a checking and a savings account with that institution.And more than one-fifth of these interested customers will also be open to that institutions personal finance,lending,and insurance offerings(figure 3).Issuers have an exciting opportunity to elevate their role and meet customers broader fina
54、ncial needs.What key strategic considerations can help them seize it?Figure 3.Customers are likely to expand financial relationship with an institution that provides them with their preferred functionalities and payment experiences 68%64%24%23%22%21%Checking accountSavings accountPersonal financial
55、managementPersonal loanLife insuranceHealth insuranceWealth managementCrypto walletProperty and casualty insurance16%15%10%(Of those agreeing that they will expand their relationship,percentages indicate cardholders who indicate they would use the following financial products)Which of these financia
56、l products would you use with this financial institution?To what degree would you agree that“I will significantly expand my financial relationship with an institution that provides me with my preferred features”from figure 1?Agree1 that they will significantly expand their relationship64%Note:1.Incl
57、udes respondents who“strongly agree,”“agree,”or“somewhat agree”that they will expand their product relationships.Source:Deloitte 2021 Consumer Payments SurveyElevating the payments experience 8The first consideration would be to strengthen customer-centricity to build seamless and intuitive experien
58、ces.Issuers should reimagine their operating model into one that breaks product silos;reorganizes data collection and integration;and binds their organization structure,leadership,talent,and processes with a single thread of doing whats best for the customer.Issuers should also consider creative mar
59、keting campaigns to educate customers on these modern functionalities and how they can make it easier for customers to manage money.Younger consumers generally prefer a more social and interactive approach to learn financial principles and money management.For instance,many Gen Z consumers starting
60、with investments watch YouTube videos to learn the basics of investing,follow other investors on trading and social media platforms,and virtually engage with them and other enthusiasts in their community.But seldom do they call their bankers or card issuers for advice.18 Tapping social media influen
61、cers should help issuers to build authentic engagement with this cohort.A laser-focused execution on top of existing technology stacks will be another important consideration to design customer-centric experiences,as most card issuers legacy systems are reliant on their mainframe providers data and
62、reporting.19 Issuers can go through a modernization initiative in-house to overhaul their technology architecture,but this could be a long-winded process,and the costs of developing modern issuing capabilities can be prohibitive.Moreover,if not perfectly executed,payment integrations can become comp
63、lex,inefficient,and vulnerable to security risks.Alternatively,issuers can consider partnering with payment processors in the ecosystem who share the same overall goals.These processors with open API-based technology can make it simpler,faster,and more efficient to connect new capabilities to issuer
64、s legacy systems.Issuers should,however,carefully assess the resilience of these processors technology stacks against small-and large-scale disruptions.They should ensure that the processors not only bring digital card issuance capabilities but also the ability to rapidly develop and roll out new fu
65、nctionalities at scale.Moreover,the ability to easily integrate with different players in the ecosystem,including new merchants,should be a prerequisite.Merchant acceptance has been one of the primary drivers of success for any innovation in the consumer payments worldwhether we consider the accepta
66、nce of cards several decades ago,contactless technology over the past few years,or BNPL offerings more recently.Issuers should therefore ensure that they are listening to merchants and accounting for their interests while modernizing experiences for consumers.For instance,one such area is faster car
67、d program rollouts.In typical co-branded partnerships,merchants and issuers indulge in lengthy card negotiations20 spanning over several months,sometimes even years,before they launch new card programs.21 But digitally native companies expect agile execution in everything they do.By working with ope
68、n API-based processors,issuers can provide a self-service experience to merchants to customize and test cards in a private sandbox and launch new programs with a faster time to market.22 To learn more about reimagining a customer-centric operating model,read Deloittes 2020 report Getting ahead of th
69、e curve.Elevating the payments experience 9Modern card issuing presents an opportunity for issuers to reimagine their roles in consumers lives.A card that has traditionally been a payment product and a financing tool can open doors for better money management and unlock deeper financial relationship
70、s.Issuers should strategically assess modern card issuing features that are of interest to consumers and collaborate with the right partners to bring those to market,both with agility and at scale.While some issuers may adopt a wait-and-watch approach,those with strategic acumen,technology foresight
71、,and an execution mindset can seize the opportunity to empower their customers and strengthen loyalty.The time to act is now 10Elevating the payments experience Endnotes1.Suman Bhattacharya,“How BofA solved the industrys in-branch card issuance problem,”Bank Automation News,June 26,2019.2.Ibid.3.Mas
72、tercard,“COVID Consumer Impact Tracker November 2021,”2021.4.Michael Dimock,“Defining generations:Where millennials end and Generation Z begins,”Pew Research Center,January 17,2019.5.Sarah Perez,“Fueled by pandemic,contactless mobile payments to surpass half of all smartphone users in US by 2025,”Te
73、chCrunch,April 5,2021.6.Toast,“Toast launches enhanced contactless suite to help increase restaurant revenue and support restauranteurs in reimagining hospitality,”press release,April 13,2021.7.Elizabeth Weise,“Amazon just opened a grocery store without a checkout line,”USA Today,December 5,2016.8.I
74、mani Moise,“Lenders say Americans are ready to use their credit cards again,”Financial Times,October 25,2021.9.Board of Governors of the Federal Reserve System,Report to the Congress on the profitability of credit card operations of depository institutions,July 2021.10.Holly D.Johnson and Jacqueline
75、 DeMarco,“How long does it take to get a credit card?,”Bankrate,December 13,2021.11.Kate Fitzgerald,“American Express debuts in-app connection to PayPal,”American Banker,October 7,2021.12.Marqeta,A guide to understanding modern card issuing,January 9,2021.13.Sara Rathner,“HMBradley launches credit c
76、ard with automatic rewards customization,”NerdWallet,July 22,2020.14.PYMNTS.com,“Mastercard on the Digital First transformation of credit cards into daily money management tools,”October 1,2020.15.Ibid.16.Ryan Lawler and Mary Ann Azevedo,“Credit card and payments companies compete for a slice of the
77、 growing BNPL market,”TechCrunch,October 28,2021.17.Strongly agree,agree,or somewhat agree that they will expand relationship.18.Mallika Mitra,“Gen Z is rewriting the rules for personal finance in real time.Thats good,right?,”Money,July 21,2021.19.Marqeta,“Why the credit card industry needs a tech u
78、pgrade,”Marqeta Blog,April 8,2021.20.Marqeta,A guide to understanding modern card issuing.21.Suman Bhattacharyya,“Inside Marqetas plans to grow its card-as-a-service offering,”Payments Dive,March 2,2021.22.Marqeta,A guide to understanding modern card issuing.About Deloittes Payments teamAbout Marqet
79、aContact usJames RobinsonSenior Director Corporate CommunicationsMarqeta Inc.+1 530 913 Zach AronUS Banking&Capital Markets Payments leaderPrincipalDeloitte Consulting LLP+1 714 913 Elevating the payments experience Deloittes Payments team serves clients across the entire payments ecosystemissuing b
80、anks,acquiring banks,card networks and associations,acquiring processor/service providers,merchants,fintechs,and payment platforms such as mobile wallets and real-time payments for B2B,B2C,and P2P.Our insights can help you take advantage of change.If youre looking for fresh ideas to capitalize an op
81、portunity or address your challenges,we should talk.Marqetas modern card issuing platform empowers its customers to create customized and innovative payment cards.Marqetas platform,powered by open APIs,gives its customers the ability to build more configurable and flexible payment experiences,accele
82、rating product development and democratizing access to card issuing technology.Its modern architecture provides instant access to highly scalable,cloud-based payment infrastructure that enables customers to launch and manage their own card programs,issue cards,and authorize and settle transactions.M
83、arqeta is headquartered in Oakland,California,and is enabled in 39 countries globally.For more information,visit ,Twitter and LinkedIn.About this publicationThis publication contains general information only and Deloitte is not,by means of this publication,rendering accounting,business,financial,inv
84、estment,legal,tax,or other professional advice or services.This publication is not a substitute for such professional advice or services,nor should it be used as a basis for any decision or action that may affect your business.Before making any decision or taking any action that may affect your busi
85、ness,you should consult a qualified professional adviser.Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited,a UK private company limited by guarantee(“DTTL”),its netwo
86、rk of member firms,and their related entities.DTTL and each of its member firms are legally separate and independent entities.DTTL(also referred to as“Deloitte Global”)does not provide services to clients.In the United States,Deloitte refers to one or more of the US member firms of DTTL,their relate
87、d entities that operate using the“Deloitte”name in the United States,and their respective affiliates.Certain services may not be available to attest clients under the rules and regulations of public accounting.Please see to learn more about our global network of member firms.Forward-Looking Statemen
88、ts This report contains“forward-looking statements”within the meaning of the“safe harbor”provisions of the Private Securities Litigation Reform Act of 1995.Forward-looking statements expressed or implied in this press release include,but are not limited to,statements relating to the need for modern
89、card issuing;consumer desire for modern card issuing solutions;the rate at which modern issuing solutions may be adopted;and the capabilities of modern card issuing.Actual results may differ materially from the expectations contained in these statements due to risks and uncertainties,including,but n
90、ot limited to,the following:the effect of uncertainties related to the global COVID-19 pandemic on U.S.and global economies and demand for Marqeta services and products;the risk that Marqeta is unable to further attract and retain its customer base;the risk that customers will not perceive the benef
91、its of Marqetas products and services;the risk that Marqetas products and services do not operate as intended;the risk that Marqetas products and solutions will not achieve the expected market acceptance;and the risk that competition could reduce expected demand for Marqetas services.Detailed inform
92、ation about these risks and other factors that could potentially affect Marqetas business,financial condition and results of operations are included in the“Risk Factors”disclosed in Marqetas Annual Report on Form 10-K for the year ended December 31,2021,as such risk factors may be updated from time
93、to time in Marqetas periodic filings with the SEC,available at www.sec.gov and Marqetas website at http:/.The forward-looking statements in this press release are based on information available to Marqeta as of the date hereof.Marqeta disclaims any obligation to update any forward-looking statements,except as required by law.Copyright 2022 Deloitte Development LLC.All rights reserved.Member of Deloitte Touche Tohmatsu Limited