U.K.-based e-money account and rewards provider credEcard announced on Tuesday the launch of its instant issue loan card, which will allow credit unions to issue instant loans to members through a single-use Visa debit card.
The launch of the product eliminates the need for large amounts of cash and may be able to help deter members from turning to risky products like payday loans to meet their short-term credit needs.
“credEcard Instant Issue has helped us to better serve our members and protect our staff and premises,” Peter MacDonagh, the manager of Riverside Credit Union in the U.K., said. “Previously, large amounts of cash were needed onsite to fulfill loan requests. This carried a significant security risk and was also costly as the management and transport fees for cash can be sizable. Now all we need is a computer system and a card reader… Everyone is safer and the whole operation is more efficient, enabling us to do our jobs better.”
Ten credit unions have adopted the product so far. Borrowers are issued a plastic payment card at the time of loan issuance, from which they can withdraw the funds. Card recipients will automatically receive a credEcard plus account that allows for money transfers, bill payments and ATM withdrawals.
More than 1,000 instant issue credEcards are in circulation—a number the company expects to rise to 10,000 by the end of the year.
“Services of this kind are of crucial importance right now,” Geoff Leech, the managing director of credEcard, said. “Unfortunately, many people that need rapid access to cash think that extreme interest lenders are their only option. credEcard Instant Issue helps credit unions to offer a competitive and ethical alternative. It also provides another avenue through which they can give financial guidance to their members… All of this innovation has been developed in response to the needs of credit unions and their members. We are continuing to work closely with our welfare support partners to understand their pain-points and add functionality to our platform to solve as many issues as we can.”