What is card issuing for businesses and how does it work?

Key takeaways:

• Types of cards that businesses typically issue include virtual cards, debit cards, credit cards, and prepaid cards.

• Launching a card programme via card issuing can improve the stickiness of your product, unlock new revenue streams, reduce time to market, and offer insights into customer preferences.

• Partnering with a card issuing platform with compliance support, flexible controls, and API integration options can help you ‌create, launch, and scale a customisable card programme efficiently.

Card payments, including credit and debit cards, are the most preferred payment methods for global consumers when making cross-border purchases. Credit cards and debit cards lead the race compared to other payment methods, and businesses are taking advantage of the popularity of card payments by launching their own private-label card programmes to boost brand loyalty and engagement.

To meet this demand, modern fintech companies have made it easier and more accessible for businesses to issue their own private-label cards, also known as white-label cards. With card issuing, you can set up your own card programme that incentivises customers to interact more with your business and ultimately drive revenue. In this article, you’ll learn what card issuing is, its potential benefits to your business, and how you can identify the right card issuing partner.

What is card issuing?

Card issuing is the process of creating and managing payment cards, such as debit, credit, or prepaid cards, for business or customer usage. These cards can be used for a variety of purposes, including first and third-party use cases such as managing corporate expenses and employee spend, distributing payroll, or developing and monetising your own card proposition.

Although developing a private-label card programme was out of reach for many, modern fintechs have made card issuing more accessible. Driven by many advancements in fintech, improved payment processing technologies, and more accessible APIs, these innovations allow businesses to customise and issue their own branded cards. As a result, businesses who launch their own programmes can improve customer loyalty and drive greater revenue.

The combined number of general-purpose and private-label payment cards in circulation globally is projected to reach nearly 30 billion in 2028, with private-label cards making up an estimated 30% of this market, which accounts for nearly 8.5 billion cards. This anticipated surge in demand presents a valuable opportunity for businesses to generate significant revenue by developing their own card proposition.

If you want to launch your own card programme but aren’t sure where to start and what resources are required, partnering with a card issuing platform can help. Doing so lets you skip the complexities and get your card to market faster. You’ll have full control over the design and features of your card, so you can tailor the card to your brand and customer needs, creating a more personalised experience.

Benefits of issuing cards for your company

Card issuing unlocks benefits that enable businesses from various industries to improve customer experience and brand loyalty, while opening new lines of revenue. By issuing your own cards, you can have greater control and flexibility – whether it’s deciding ‌card features, setting spending limits, or customising rewards for customer card programmes. Here are some benefits of building a card proposition for your customers:

🟠 Create a stickier product

Card issuing can significantly enhance the stickiness of your product. A unique card programme creates a more integrated experience for your customers, and can attract and retain customers who value the added benefits. You can work with card issuers to configure your card programme, such as offering cashback, points, or other incentives for every transaction. For example, you could build a card programme with a points-based system that lets customers redeem points for goods or services, including your own. This encourages repeated engagement with your brand, increasing customer loyalty and strengthening brand recall.

🟠 Unlock new revenue streams

Through issuing cards, you can build additional revenue streams that can help diversify your business finances and improve cash flow management. For example, you may decide to charge annual fees, late fees, or renewal fees. If you have a global customer base, charging a small margin on foreign transaction fees could ‌also become a source of revenue. The additional revenue can improve your cash flow and be reinvested in your business, whether it’s improving operations or offerings to your customers.

🟠 Reduce time to market

Launching your own card programme can also set you apart from your competitors. Being one of the first to launch a private-label card can help you capture market share before competitors can react, establishing your business as an industry leader. Partnering with a card issuer that offers private-label issuing solutions can greatly reduce your time to market. Many fintechs offer plug-and-play solutions, complete with pre-built APIs for integration, Know Your Customer (KYC) services, fraud detection, and customer support. With the necessary infrastructure and compliance support, you can accelerate the launch of your programme and scale efficiently.

🟠 Gain insights into customer preferences

Card issuing can provide valuable transaction data that helps you better understand customer behaviour, preferences, and spending patterns. You can use these insights to tailor your card programme to better meet customer needs, such as by offering personalised discounts or targeted offers, further improving the customer experience.

Types of cards you can issue

Card issuers can help you with many different types of payment cards. Here are different types of cards that you can consider, depending on your needs:

🟠 Virtual card

Virtual cards are digital versions of traditional credit or debit cards. They are designed to be used for online transactions and can be generated instantly, often through a mobile app or a website. Virtual cards can be issued to your customers as part of their earnings or benefits. For example, you could issue freelancers and gig workers virtual cards as a way of receiving payments from their clients. Virtual cards have a reduced risk of fraud compared to physical cards, since they can't be lost or stolen. If needed, your customers can freeze or cancel them instantly to prevent misuse.

🟠 Debit card

A debit card accesses funds directly from a linked bank account. This type of card provides real-time deduction, where spending is limited to the available balance in the linked account. For example, a global payroll platform can issue business debit cards to remote workers, providing them with easy access to their earnings and the ability to spend or withdraw funds directly, streamlining financial management and enhancing convenience.

🟠 Credit card

Credit cards provide a line of credit to the cardholder, who can only spend up to a pre-set limit and has to repay the balance within a specific period of time. For example, marketplaces could issue their own credit card programmes that offer customers exclusive rewards to build customer loyalty. This can help drive sales and repeat purchases, incentivising customers to spend on their platform.

🟠 Prepaid card

A prepaid card is a payment card funded with a preloaded balance that can exist as both physical and virtual cards. Spending is limited to the available balance, which prevents overspend and misuse.  For example, a ride-hailing company can issue prepaid cards to gig workers for immediate payment of fares, tips, and expenses, ensuring they have quick access to funds and reducing the need for cash transactions.

Key steps in the card issuing process

Issuing private-label cards for your card programme involves several steps, from defining programme objectives to setting card features and integrating the programme with your existing systems. The card issuing process typically looks like this:

1. Define your objectives and customer needs

Identify the purpose of your card programme – is it to increase customer loyalty, generate additional revenue, or enhance brand visibility? Understanding your customer base can also help fine-tune your card programme. Segment your customers and identify any patterns in spending habits. This alignment will help you design a card programme that resonates with your customers.

2. Choose a card issuing partner

Research and compare card-issuing platforms that offer white-label solutions. Consider the costs involved, the capabilities they offer, and the level of support they can provide. Some card issuing platforms handle regulatory compliance for businesses, which is especially important for businesses that operate globally. A strong card issuing partner will offer a comprehensive suite of solutions that help you manage everything – from credit checks to transaction monitoring, fraud prevention, and customer support.

3. Design your card and set up your card programme

When designing your card, align the colours, logos, and fonts with your brand guidelines. Specify features, such as contactless payment and chip technology, and card benefits, such as cashback or loyalty points. Determine the fees and pricing structure, such as annual fees, late fees, renewal fees, and foreign transaction fees. You can also set parameters like spending limits and merchant category restrictions to tighten your programme. To prevent fraud, customise your risk threshold and set security checks. For example, you can set 3D Secure authentication to be triggered when there’s a suspicious transaction (e.g. high-value purchase or transaction from an unfamiliar location).

4. Integrate card programme with existing systems

To monitor and manage issued cards efficiently, it's important to integrate the card programme with your existing systems. This may involve connecting with your accounting and customer relationship management (CRM) software, and more. A card issuing platform that provides APIs and other integration options to make this a seamless process will greatly reduce the time and resources required, freeing up time for you to manage other aspects of your business.

5. Launch and manage your card program

Before launching your card programme, conduct testing to ensure everything works as expected. Once the programme is live, monitor and evaluate its performance. Customer feedback and usage patterns can be valuable insights that help you refine your programme so that it becomes more attractive to your customers. For example, if ‌usage patterns show that many customers often hit their spending limits and you receive feedback that this frustrates them, you could introduce higher spending limits or tiered limits based on customer spending history and credit-worthiness. 

Choosing the right card issuing partner

Selecting the right card issuing partner is critical to launching a successful card programme. As mentioned, the card issuing platform needs to offer capabilities that can meet your objectives and your customers’ needs. Here are some key considerations when it comes to choosing a card issuing platform:

🟠 Technology and integration capabilities

Does the card issuing platform offer APIs that integrate with your existing financial tools and systems? For example, an integration that syncs card transactions directly with your accounting software can save hours of manual data entry and reduce costly errors.

🟠 Scalability

Does the card issuing platform offer capabilities that can adapt to your evolving needs, such as multi-currency support, global issuing capabilities, issuance of different card types, and flexible card programmes? For example, a business might issue virtual cards initially and require physical cards later as it scales internationally.

🟠 Compliance and security

Does the card issuing platform adhere to global compliance standards (e.g. PCI DSS) and have robust security and fraud prevention mechanisms in place?

🟠 Customer support and onboarding

Does the card issuing platform offer comprehensive onboarding and dedicated support during setup and beyond, such as a responsive support team and FAQ resources?

Say you’re deciding whether to go with traditional banks or modern fintechs. While traditional banks have a long history of adhering to financial regulations and maintaining high security standards, they may require more development work to integrate their systems with businesses due to legacy infrastructure. This results in limited integration and scalability as compared to modern fintechs with robust API integrations, which can better support businesses looking to launch a card programme rapidly.

Future trends in card issuing

As technology advances and consumer expectations shift, the future of card issuing will continue to be technology-driven. With growing customer preferences for contactless payments and digital wallets, it's clear that customers will continue to demand payment services that are easy, intuitive, and secure. To keep pace, financial institutions need to integrate new technologies that can issue virtual cards instantly and support digital wallet compatibility. Traditional financial institutions with legacy payment infrastructure may struggle to adapt to the real-time needs of modern businesses, where speed matters.

In fact, by 2027, it is expected that 1.3 billion cards will be issued via digital platforms and driven by APIs. This means that businesses will have greater access to flexible, agile, and secure card issuing solutions. However, the increasing reliance on APIs also introduces security risks, exposing financial institutions to potential data breaches and fraud. As a result, regulations will continue to evolve to ensure consumer data privacy and fraud prevention. For example, the Consumer Financial Protection Bureau (CFPB) in the US announced that it'll extend bank-level scrutiny to major payment providers processing over 13 billion transactions annually through digital wallets and payment apps, including Apple Wallet, Google Pay, and Venmo.

Notable data breaches, such as the 2024 cyberattack on Evolve Bank that affected its partners and customers, highlight the need for financial institutions to continue investing in security and fraud prevention. While fintechs and card networks are already implementing artificial intelligence (AI) powered fraud detection, there's still room to explore next-generation solutions like biometric authentication and blockchain technology to further safeguard transactions.

Issue customisable, multi-currency cards without the heavy lift

With modern fintech solutions, it’s now easier for businesses to set up your own card programme. The question now is, how do you do so while staying ahead of the competition?

Partner with Airwallex to launch your own private-label card proposition and unlock new lines of revenue. Our global card issuing solution lets you issue physical and digital multi-currency Visa cards across 40+ countries. Customise card features, spend limits, and rewards to build a card programme tailored to your business needs and customers’ preferences.

From configuration to launch, Airwallex works closely with you to perform end-to-end testing, ensuring that your card programme works exactly as you intended. With our built-in compliance support, you’ll be able launch and scale your card programme quickly, giving you a competitive edge.

¹ https://www.airwallex.com/ecommerce-campaign-2024

² https://www.statista.com/statistics/283578/payment-card-growth-trend-global/

³ https://www.reuters.com/business/finance/visa-teams-up-with-affirm-launch-card-flexible-payments-us-2024-11-12/

⁴ https://virtual-pay.io/the-future-of-card-issuing-trends-and-innovations-in-the-industry/

⁵ https://www.reuters.com/technology/us-watchdog-issues-final-rule-supervise-big-tech-payments-digital-wallets-2024-11-21/

⁶ https://therecord.media/affirm-lender-data-breach-evolve-bank-cyberattack