Banking Phygitization Strategies Driving the Delivery of 2 Billion Instantly Issued Digital and Virtual Payment Cards in 2028

Offering a comprehensive digital-first experience is increasingly essential for attracting and retaining millennial cardholders. Banks that prioritize digital-first experiences will see higher customer retention rates and sustain a competitive advantage. According to a new report from global technology intelligence firm ABI Research, almost 2 billion instant-issuance digital payment cards will be shipped yearly by 2028.

Digital card issuance benefits both issuers and cardholders through access to value-added services and cost reductions by transitioning to a hybrid physical and digital model. “The most successful technology developers in this space will seek to provide a selection of digital-first integration models, enabling a solutions provider to reach a broader audience of potential bank partners, accommodating a diverse range of requirements,” explains Sam Gazeley, Digital Payment Technologies Industry Analyst at ABI Research. “This flexibility caters to financial institutions seeking to maintain their in-house IT infrastructure or transition to a cloud-based backend.”

This ongoing acceleration toward digital-first banking reflects the increasing availability of digital cards and the growing presence of neo and challenger banks reaching previously underserved populations with agile digitized banking services. As the tech-savvy demographic, characterized by Gen-Z customers, expands, there is a greater desire for convenience and efficiency in banking and card management services.

The trend in digital instant issuance is being accelerated because customer expectations have progressed beyond solutions tailored to their needs and have now extended to the capacity to customize solutions to align with their personalization preferences. Vendors capable of delivering such solutions, including offerings like custom card designs or personalized rewards, will contribute to financial institutions fostering increased customer buy-in and loyalty, as the physical card retains its critical role within the phygitization of banking services. Indeed, technology developers such as Thales, IDEMIA, G+D, Entrust, CPI Card Group, and HID Global are offering end-to-end digital card migration platforms to empower today's banks to launch their own portfolios of digital payment cards.

These findings are from ABI Research’s  Considerations for Digital Card Issuance Platform Approaches application analysis report. This report is part of the company’s Digital Payment Technologies research service, which includes research, data, and analyst insights. Based on extensive primary interviews,  Application Analysis reports present an in-depth analysis of key market trends and factors for a specific technology.