The credit card industry has achieved an unprecedented 50% growth in the last 3 years, thanks to the utilisation of co-branded cards. Large traditional banks and fintech businesses are aiming to cultivate stronger brand loyalty, increase brand visibility, and drive revenue growth by deploying more credit cards in the market. In addition to this, credit card issuers want access to a captive audience that the businesses have, in order to cross-sell other banking products.

Earlier, launching a credit card program took banks & businesses several quarters or sometimes even years. But, today, we live in a simpler, faster, super-modular world. Fintechs have changed the financial services landscape beyond recognition. With the rise of open banking, the credit-card stack is available for businesses and banks in an easy-to-integrate, plug-and-play fashion. In this article, we take a closer look at credit card-as-a-service.

What is Credit-card-as-a-Service?

Credit cards in India can be issued solely by Regulated Entities, which in most cases are Scheduled Commercial Banks (SCB) and rarely Regional Rural Banks through their sponsor SCBs or NBFCs with explicit approval from the regulator. Credit-card-as-a-service can be of the following types:

As Technology Service Provider (TSP) to Banks: To bolster the regulated entities’ tech capabilities for card issuance and management, the banks tend to outsource such services to technology service providers specialising in products like credit cards.

Co-Branding Integration: Partner Businesses can issue personalised co-branded cards to their customers by integrating with a Credit-card-as-a-service provider, which in turn does all the requisite plumbing with the issuing entity and the card networks. The role of the co-branding business partner in this transaction will be limited to that of a marketer/distributor.

Inside the Machine.

A credit-card-as-a-service provider takes care of the following modules, depending upon whether the card being issued is a secured or an unsecured one so that you can focus on your topline and bottomline.

Application Processing & Onboarding: The process of enrolling and setting up a new customer account with the credit card issuer.

Card Personalisation and Issuance: Customising and producing physical credit cards with personalised details for approved applicants.

Card Activation: Enabling the functionality of a newly issued credit card for the cardholder to start using it.

Card Replacement / Hot-listing / Renewal: Handling requests for replacing lost, stolen, or damaged credit cards, blocking cards reported as lost or stolen and renewal of expired cards.

Card Management: Overseeing the ongoing administration and maintenance of credit card accounts, including credit limits, usage monitoring, and account updates.

Card Plastic Specifications Compliance: Ensuring that the physical credit cards meet industry standards and compliance requirements.

Authorisation Processing: Verifying and approving transactions made using the credit card by checking available credit and account status.

Open to Buy: The remaining credit limit available for the cardholder to use after accounting for existing charges and pending transactions.

EMI: Enabling cardholders to convert large purchases into equal monthly instalments for easier repayment.

Billing Module: Generating and managing credit card statements with detailed transaction information and payment due dates.

Fee Management: Administering and collecting various fees associated with credit cards usage, such as annual fees or late payment fees.

Rewards Program: Implementing and managing a program that offers cardholders rewards or benefits based on their credit card spending.

Operations: The overall management and coordination of the credit card service, including settlement & recon, customer support, fraud prevention, and compliance.

Notifications & Alerts: Sending timely notifications and alerts to cardholders regarding transaction updates, payment reminders, and security alerts.

Delinquency Module: Managing and addressing instances of late or missed credit card payments by cardholders.

Data Management: Safeguarding and managing the collection, storage, and processing of cardholder data in compliance with data protection regulations.

How do the stakeholders interact?

Given below is a sample stakeholder diagram that illustrates how the different parties interact in the issuance & management of a secured credit card by a corporate / business.

CARD91 is building credit-card rails to help Indian businesses and banks launch their credit card programs at industry-best speeds. Reach out to us –

If you are a Bank, looking for a credit card issuance & management solution.
If you are a Business, planning to launch a co-branded credit card.
If you are a Corporate, planning to launch a corporate credit card program for employees.

Authored by Praveen Varghese, Product Manager, CARD91

Today, banks issue various prepaid instruments like prepaid cards, digital wallets, gift cards, fastags, etc. that are mandated to comply with certain regulations, as prescribed by the regulator in its master directions. At the same time, regulated entities carry out remittances, issue forex, international debit and international credit cards governed by tax laws. Any issuer providing multiple types of instruments, or partnering with multiple technology service providers is expected to follow these regulations and laws. The prepaid instrument regulations are meant to monitor/manage the level of prepaid instrument loading and usage at an individual customer level. The tax laws focus on collecting tax at source (TCS). These compliances demand a centralised repository that takes care of the following:

Uniquely identifying the customer and rolling up based on personally identifiable information (PII) sought from the customer at the time of onboarding.

Classifying customers based on their risk-profile categorisation.

Maintaining personalised limits at the customer level.

Controlling loading and usage at the issuer level.

Intimating the Bank / Regulated Entity on TCS applicability and rates.

This is precisely what the Centralised System of Records or C-SOR offers. A centralised System of Records (C-SOR) is a centrally managed repository that maintains customer-level records for a range of instruments issued by technology service providers (TSP) on behalf of the issuer. All customer actions undertaken by the TSP are sent to C-SOR for verification and validation. This means that only C-SOR-validated customer actions are treated as valid. Given below are a few scenarios that illustrate how the Centralised System of Records could be used by issuers in the context of various businesses they undertake.

Prepaid Cards: Bank and Non-bank PPI issuers issue prepaid cards through multiple TSPs. To maintain the balances and daily/monthly/yearly transactions allowed across transaction types and KYC types, be it full KYC or small PPI, the issuing entity should be employing a centralised system of records. For instance, a customer who was onboarded via both TSP1 and TSP2 will be identified as a single customer in the C-SOR system and the usage data should be managed accordingly.

Payments Bank: Payments Bank Savings Account balances plus balances contained in PPI or other internal wallets should not cross 2 Lakh INR at EOD. The differential should be swept into its partner Scheduled Commercial Bank’s deposit account. CSOR makes sure that the aggregate balance across applicable instruments doesn’t cross the prescribed limit.

LRS Limit Maintenance: Limits under the Liberalised Remittance Scheme (250,000 USD in a fiscal year) can be maintained by the C-SOR based on usage across instruments like Credit Cards, Debit Cards, Remittance Accounts and Forex Cards. The issuer can also be notified about usage that affects the TCS charged at a customer level.

CARD91 has built a robust centralised system of records as an API-led solution which lets issuers monitor its registered customers on a real-time basis. For more information, please reach out to sales@card91.io.

Written by Praveen Varghese, Product Manager, CARD91.