Every card in circulation is the result of multiple players working behind the scenes, from banks and fintechs to payment networks and processors. Understanding this process isn’t just important for issuers, it’s essential for remaining on top.
The card issuance journey starts with an application. Whether online, through a mobile app or in-person, a customer requests a new card. The issuer, typically a bank or fintech then runs credit checks and risk assessments to determine eligibility. Once approved, an issuer processor takes the reins, setting up the card account, generating critical credentials like the card number and CVV and ensuring everything meets strict security standards such as PCI-DSS compliance.
Once the card setup is complete, the issuer processor collaborates with the payment network, think Mastercard or Visa, to integrate the card into the global payments infrastructure. This step is crucial; without it, the card wouldn’t function across merchants and payment platforms worldwide. The issuer then orders a physical card, which goes through a rigorous personalisation process where a third-party bureau prints essential details, embeds security features like EMV chips and prepares it for shipment.
Once the card arrives in the customer’s hands, activation is the next step. Whether through a mobile app, a secure online platform or a phone call, activation ensures the cardholder’s details are correctly linked, allowing for immediate use. Behind the scenes, the issuer processor continues to play a critical role, handling real-time transaction authorisations, monitoring for fraud and ensuring compliance with security regulations.
Lifecycle management doesn’t stop at activation. Issuers oversee card renewals, replacements for lost or stolen cards and reissues in the event of fraud. Every time a cardholder makes a transaction, the issuer, acquirer and payment network collaborate to ensure authorisation, authentication and settlement run seamlessly. This coordination is essential to minimising failures and maintaining a frictionless user experience.
The traditional approach to card issuance, while still dominant, is riddled with inefficiencies. Historically, banks issued cards linked to current accounts or partnered with retail and travel brands for co-branded programmes. These programmes, however, often required 12 to 24 months to launch, burdened by large teams, complex integrations and substantial costs. Many banks relied on white-label providers to manage operations, further inflating expenses.
Legacy infrastructure is another roadblock. Traditional payment systems and data centres require hefty investment and strict regulatory adherence. Banks often struggle to modernise fast enough to keep up with shifting market demands, leaving gaps for agile fintechs and challenger banks to exploit. The inability to adapt quickly not only stifles innovation but also limits revenue potential.
High costs make managing an end-to-end card issuance process expensive. Issuers must invest in hardware for personalisation, software for secure payment processing and human resources for compliance and fraud detection. Each card issued incurs fixed production, distribution and management costs, which escalate as the customer base grows. Smaller issuers, lacking economies of scale, struggle even more to manage these rising expenses.
Bringing a new card to market isn’t just costly, it’s slow. From securing regulatory approvals and integrating with payment networks to designing the card and setting up customer service, each phase adds months to the timeline. Traditional issuers simply can’t keep pace with today’s fintech players, where instant issuance and digital-first banking are the new norm.
Issuers must comply with a web of regulations that vary across jurisdictions, adding delays and complexity. Non-compliance comes with hefty penalties, making regulatory vigilance a constant priority. For banks operating across borders, the challenge multiplies, creating significant barriers to international expansion.
With fraud tactics changing daily, issuers must continually upgrade security infrastructure, adopt real-time monitoring and invest in fraud detection tools. Legacy systems, however, are notoriously slow to adapt, leaving issuers vulnerable to increasingly sophisticated attacks.
The traditional model is unsustainable for modern financial players. Enter Cards-as-a-Service (CaaS), a faster, more cost-effective way to issue cards without the headaches of legacy infrastructure. By leveraging cloud-first platforms, API-driven technology and scalable solutions, issuers can reduce costs, accelerate go-to-market timelines and simplify compliance.
For digital banks and fintechs looking to scale, embracing modern issuance solutions isn’t just an advantage, t’s a necessity. The future of card issuance belongs to those who can adapt and deliver frictionless experiences.