Card-as-a-Service Business Model

"With payment modernisation gaining a lot of attention, the dynamic in the card business is shifting. According to HPS, banks and financial institutions are at risk of loosing US$100 billion to US$150 billion in revenues globally if they don't modernise their infrastructure.

Although card payments have been around for a long time, recent entrants in the payments landscape have brought about significant disruptions. The rapid pace of innovation within the fintech sector coupled with challenges stemming from outdated technology and intensified competition is inflicting a new pace in the card ecosystem. As a result, FIs are forced to re-evaluate their current infrastructure and payment capabilities to service this dynamic environment.

Banks and issuers are turning to core processors to enter new markets in order to increase scale and sustain growth and profitability. The card business model is evolving from a primarily transactional model to one that focus on the creation of value-added services for customers, forcing banks to redefine their strategies to navigate emerging challenges and maintain their competitive edge.

#CaaS, Card-as-a-Service is one of those innovative business model that provides a way for FIs to innovate.

𝙎𝙤 𝙬𝙝𝙚𝙧𝙚 𝙙𝙤𝙚𝙨 𝘾𝙖𝙖𝙎 𝙛𝙞𝙩 𝙞𝙣?

◼️Caas can be defined as a flexible approach to card issuance in which a FI or a non FI outsource migrate the existing payment stack to a specialised third party that will handle:

🖇️ The card issuance

🖇️ The card programme management

🖇️ The maintenance of the cards

◼️CaaS is considered to be a modern-day approach to traditional payment card services that drives innovation and enhances the customer experience in the payments industry.

◼️CaaS is growing in adoption as an enabler and turnkey solution. With the development of Open APIs, the cloud infrastructure, core and non-core financial businesses are increasingly leveraging the opportunity that modern card issuance offer."

Author

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