So, you're interested in launching a card programme - what do you need to know?
Here, we explain the card ecosystem, the various partners to consider and the capabilities you’ll need to launch a card programme. We'll also run through the new way of launching a card programme. Spoiler: We've just released our own card issuing API to make it super easy!
Running a card programme presents a big and accessible opportunity like never before. Cards are fast becoming one of the most interesting areas of the payments marketplace and the potential for innovation and originality here is huge.
You may be a challenger bank disrupting the status quo, or a company keen to seize new opportunities and offer entirely new card payment products. Maybe you’re a lender wanting to deliver a first-class lending solution by issuing cards so that your customers can start spending, straight away; or a forward-thinking employment services provider intending to issue employees with cards so that salaries can be drawn down flexibly, rather than in one lump sum.
Whoever you are, you, like us, already see the potential in card issuing and the value of having this key touchpoint with your customers.
But, the process of launching a card programme is by no means a straightforward one. And we know, because we’ve done it. We became a card issuer, so that you don’t have to, because building and operating a card programme is complicated.
Who are the suppliers in the card issuing ecosystem?
Firstly, the supplier ecosystem is a complex space and one that’s hard to navigate. As a first step, you’ll need to choose your Scheme (Visa or Mastercard) and you’ll also need to have access to a BIN (i.e. a unique address corresponding to you, telling Visa or Mastercard where to route the payment). You can either use a BIN sponsor or become a principal issuing member of Visa and Mastercard, like us, to get issued dedicated BINs or use of a shared BIN.
Once you have the right to issue Visa or Mastercard cards, you need to find a Card Processor. Every time a consumer pays with a card, an authorisation request travels through Visa or Mastercard, to the Processor who completes the anti-fraud checks, card expiry checks etc. Your systems will need to integrate separately with the Processor’s APIs and you’ll need to set up and maintain card product configuration at processor level, all while managing any downtime manually and maintaining any future integrations, as Processors are known to make frequent changes to their schema.
You’ll also need a Payments Clearing Partner to create the e-money accounts and manage the balances, responding back to the Card Processor when requests come in. This is typically the same partner that gives you access to UK payment schemes e.g. Faster Payments, Direct Debits, etc.
Choosing your Card Manufacturer marks the beginning of a lengthy and potentially expensive chip setup process, one that you’ll have to project manage. Once you have your card design and the approval of your chosen scheme, then it’s time to start manufacturing but you’ll likely pay higher prices due to lower volumes and you will have to pay regular management fees. Once the blank card stock arrives, they’ll be personalised, on demand, and dispatched daily, as each new card is ordered. Stock supplies will also need to be managed on an ongoing basis to ensure sufficient inventory for growth.
Plus, you’ll need to find a 3-D Secure provider to give you an additional security layer for online credit and debit card transactions; ensure ongoing programme compliance with regulations and schemes, monitor transactions for fraud, AML, PEPS, sanctions and manage the KYC process .
And, if you want your cards to be used in conjunction with Apple or Google Pay, you’ll need to integrate additionally with tokenisation providers, as well as making individual arrangements with Apple and Google.
Establishing and running a card programme requires multiple partnerships and each step on the road represents a separate relationship to procure and to manage. Being the go-between could become complex and laborious and having multiple partners will increase the chances that any one will experience difficulties. Handling such a complicated partner network requires time and money, all of which will draw your focus away from the customer experience.
The Modulr way: One stop shop card issuing
But, there is another way. Modulr removes the historical inefficiencies of the card issuing process and limits the costs of managing multiple stakeholders with our proven, full-stack solution. With Modulr as your single point of contact for card issuing and control, you could go live in a handful of months.
Our one-stop solution means no complex reconciliation or coordination between partners, instead you can leverage our existing relationships; we’re a principal issuing member of both Visa and Mastercard, we’re pre-integrated with a Card Processor, Card Manufacturer and 3D Secure Provider, and Payments Clearing is our bread and butter.
We can take on the scheme reporting, safeguarding, fraud monitoring, treasury management, compliance obligations and reconciliation responsibilities, and we’ll handle unplanned downtime and deal with the inevitable schema changes. We’ll give you access to the very latest in modern issuing features, straight out of the box, including card freezing, real-time spend notifications, smart rules and triggers for each card. And, you’ll be able to easily manage all these things from our customer portal.
We’ll handle all the behind the scenes complexity, leaving you to focus on your wider proposition; you’ll be able to issue physical cards for your customers for delivery within two working days and create and manage virtual cards instantly. And, as our platform was built to scale, handling millions of transactions each week, you’ll go further and grow faster.
We also give a significant amount of interchange back to our partners, that’s the fee paid by the merchant’s card acceptance provider (acquirer) to the card issuer each time a card payment transaction occurs, which offers additional revenue opportunities for those looking to launch corporate programmes.
Pretty soon you’ll be holding all the cards, and we can’t wait to see what you do with them.