As a purchaser, you may have taken notice that many non-financial companies have launched the issuance of their debit or credit cards. Brands like Manchester United, Apple, and Uber now offer their clients their branded cards. If you have tried any of these services, you’ve probably taken advantage of the appearance of card-as-a-service (CCaaS) offerings.
What is a white-label credit card (CAAS)?
The notion of white-label credit cards isn’t revolutionary innovation at all. Many companies have issued them, however, the most famous example of such products is the cards of airlines. They are typically issued and powered by common banking institutions such as Mastercard. But each time an airline organization decides to issue a new card with a new type of screening process, limitation, or rewards, it has to arrange conditions with banks, figure out the appropriate technical and legal details, and make everything up from scratch. Normally this process lasts up to two years.
The main difference between CaaS providers and traditional banks is speed. For instance, CaaS company Deserve reduces the time necessary for its customers delighted in obtaining their cards by processing the request in-house or by cooperating with conventional banking institutions.
CaaS companies make excellent work streamlining the payment process for their customers. They greatly assist customers with initiation, underwriting, bank and bureau consolidation, maintenance services, compliancy, and risk administration. Basically, CaaS companies deliver a comprehensive, end-to-end solution, from defining which customer can obtain a credit card to establishing the interest rate that should be charged on loans. They develop the “material” card and carry out necessary KYC and AML procedures as specified in the financial law. CaaS companies also put in place security systems to avoid wrongful or criminal deception intended to result in financial or personal gain.
CaaS providers are laying the foundations for the future of non-financial service cards, being just a part of a bigger embedded finance trend. If you are interested in Fintech enablers, please contact our lawyers for a consultation.