These days, consumers find themselves using niche payment methods offered by non-banking providers more than ever before. The online world has become filled with such options: digital wallets, buy now pay later plans, cryptocurrency programs, expense management systems—not to mention an endless sea of credit card reward schemes to navigate. And yet, with all the choice out there, true loyalty has become a rare and powerful competitive edge (to the companies that can achieve it).
As such, businesses across almost all industries have seized upon the chance to offer white label custom cards in an attempt to deepen engagement through tailored financial products and payment flows optimized to core user needs.
What was once solely the domain of major banks has opened up to the masses. So how did businesses come to view cards not just as a payment tool but as a disruptive strategic asset? Why the fierce competition to launch custom card programs all of a sudden? To find out, one must first understand what Custom Card issuing actually enables…
What Is Custom Card Issuing and Why Should You Care?
For the uninitiated, Custom Card issuing as a service allows companies to create customized payment card programs. Businesses can decide how physical or virtual cards get designed, issue cards to users, manage balances, control where and how money flows, and analyze transaction data.
In simpler terms, businesses can now build full-fledged financial services tailored to their customers and business model without needing to become a bank in the traditional sense.
Legacy infrastructure and fee-gobbling middlemen once made this extremely difficult for most enterprises even to consider. Still today, the payments landscape resembles a jumbled tangled web of complexity spanning issuing banks, payment networks, card manufacturers, program managers and more. Yet the connective strands tying these worlds together have continued thinning and strengthening thanks to modern technologies including:
● APIs allowing software systems to communicate with one another seamlessly
● The cloud enabling vast compute power and tools for anyone to access
● Data & analytics informing smarter business decisions in real time
Armed with these advancements, companies and their ambitions need not be constrained by banking convention. The stack required to make card issuing possible has modularized, democratized and streamlined so the most innovative ideas can thrive.
The Businesses Primed for Card Issuing Disruption
When it comes to this card issuing craze, retailers, fintechs, on-demand platforms and SaaS companies seem especially eager to get involved.
For retailers, the appeal is pretty clear. Custom card programs help form tighter customer bonds and steer buying habits within their ecosystems. Capturing associated interchange revenue then becomes the icing on the cake. Amazon set the pace on this front, luring Prime loyalists to its co-branded credit card in exchange for 5% cash back perks.
Speaking of fintechs, lending apps and neobanks can build killer mobile wallets with flexible repayment options, smoothing out clunky money management.
The on-demand economy stands ripe for issuing innovation as well. Uber long recognized how driving frictionless payments to workers and corporate customers might shift rideshare market share. The company now provides instant payouts and business expense cards promising to simplify corporate travel. This makes perfect sense given the direct relationship dynamics in play.
Lastly, SaaS providers realize issued cards can alleviate their own customers’ finance headaches. Software companies are launching corporate cards with configurable controls to tame expenses for client teams.
Across categories, the direct user relationship allows for highly tailored offerings that large banks simply can’t match. And the more embedded finance becomes in people’s lives, the
Breaking Down The Key Benefits of Card Issuing
We’ve explored why an array of businesses are plunging into card issuing, but what specifically is driving the frenzy? Earlier we hinted at some of the advantages card programs unlock, which compel companies to take the leap. Now let’s connect the dots.
Increased Loyalty & Trust
Branded payment cards built around customer needs make people feel valued and establish emotional connections with brands. As users integrate these financial tools into their lifestyles, trust deepens along with satisfaction. Retailers have long understood the power of loyalty programs and club memberships. Card issuing takes this to the next level by making brands an integral part of customer budgeting, purchasing and money management.
New Revenue Streams
Besides just facilitating payments, card issuing creates a valuable new profit center for businesses. As the card issuer, companies earn interchange fees from payments, which amounts to a tiny cut of each transaction. While fractions of a percent seem minute, it becomes sizable at scale. Mass retailers and payment giants wouldn’t push branded card products if they didn’t foresee substantial incremental revenue in interchange driven by card promotion and regular usage.
Streamlined Operations
Consolidating payments, payroll, budgeting, reporting, and more onto a single customized card platform massively simplifies operations. For on-demand platforms managing freelance workforces, issued cards reduce frictions in payouts and tracking income. SaaS companies can automate expense workflows for client employees with tailored corporate cards. Overall, specialized financial tools built for purpose enhance all money movement, lowering administrative burdens substantially.
Enhanced Data & Insights
The data produced from custom card activity offers invaluable customer intelligence to optimize products, experiences and marketing. Detailed visibility into spending patterns, favorite merchants, seasonal shifts and more guide decisions around promotions, inventory, loyalty program perks and new services that align with user needs. In addition, companies can analyze fees, interchange revenue and other metrics to identify opportunities to refine the card program’s commercial performance.
Accelerated Product Innovation
Because card issuing solutions are API-driven and cloud-based, new capabilities can be built, tested and launched faster than ever in response to market demands. Instead of relying on incumbent financial partners like big banks, companies can take the product roadmap into their own hands. This means card experiences can adapt dynamically, opening possibilities for companies to embed tailored financial services across business lines to continually raise the loyalty bar.
Final Word
Card issuing lets all types of businesses step into the ring with traditional banks to create tailored financial experiences that wow their customers and pump up profits. Instead of boring plain-vanilla payment products, companies can now develop exclusive branded card programs personalized to user needs, offering a unique competitive edge.
And the data these services generate helps call the next plays that stay ahead of user expectations. With happier customers, streamlined operations and new revenue unlocked, no wonder card issuing is sparking such fierce competition
