Once upon a time, cards were only for banks


Once upon a time, cards were only for banks. Non-financial companies wishing to add one to their offer had no choice but to choose a third-party product.

But integrated finance – a global industry that Barclays says could be worthwhile $7 billion in the next decade – was a game changer.

Banking fintechs as a service have developed and launched the tools businesses need to offer their own banking cards and solutions. This can reduce the costs businesses have to pay banks to process their transactions and allow them to create more holistic and engaging services for customers.

“Anyone dealing with transactions under any type of trade flow needs to at least figure out how much they’re paying,” says Denise Johansson, co-founder and co-CEO of card service provider Enfuce. “Is there a better way to do it? How could we have even more loyal customers? Could we earn more by providing even better service? And if either answer is yes, consider adding a payment card. »

If your startup is planning to launch a card, we have your guide here.

Is a card suitable for your startup?

The first thing you need to think about when launching a card is whether it’s right for your type of business.

“If you’re selling goods over the internet and your customers are only with you once or twice a year, adding payment methods probably won’t make sense to you,” says Johansson.

“Where you face the same customers over and over again and provide them with goods and services,” she continues. “Then you need to consider how much you pay to get paid by your customer for what you do and would it make sense for you to have a closer relationship with that customer by adding your own payment method.”

Johansson says the startups that could benefit the most from launching a range of cards ranging from growing fintechs to mobility startups. She says cards can help gain valuable customer data (through insights into their transactions), create a seamless customer experience (by making payments in the same app), generate more revenue (through interchange fees) and create more value (through loyalty programs) .

For instance, Enfuce helped Whiman all-inclusive mobility app for issuing prepaid Mastercard cards, where users can top up their card and pay for various subscriptions and pay-as-you-go plans in one place instead of having to make separate payments for each mode of transportation.

How can you motivate your customers?

Of course, the main benefit of adding a card to your business is adding value to your service.

“When you create a new type of service for someone, you want to enrich that consumer with something,” says Johansson. “They’re doing something that gives me more value, so I’m willing to pay a little more for that extra value, so that’s the markup.”

However, throwing a card without any prompts probably won’t work. There has to be a reason a customer bothers to get one, so companies should think about adding things like loyalty programs or money-saving features.

“When you create a new type of service for someone, you want to enrich that consumer with something”

“Just add the card without any benefit to the user, now it won’t work,” says Johansson. “Think when would I be ready to add a card to my wallet, that’s every time I can get benefits by withdrawing this one, so you have to incentivize your customers. It can be a program of loyalty, cashback or better discounts.

Adding the right product features can also attract customers, for example by providing integrations with large digital wallets. Enfuce helped a Nordic Neobank to provide three of the largest digital wallets on the market: Apple Pay, Google Pay and Samsung Pay. The company claims this has resulted in a 30% growth in customers and a 50% activation rate of digital wallets.

Do you have the right expertise?

So you’ve decided to launch a card and you’ve chosen your incentives, so what? Johansson says to think about how much you actually know about card payments and offering different features.

“Especially when it comes to in-app payments, if the founders, the teams, have no experience in the cards and payments space, they have brilliant ideas on how to improve a consumer’s quality of life. “, she says. “But no idea what in-app payments means, what card issuance means. So the typical problem is that it’s a big black hole for them, they see that okay, I have this subscription model, but what am I doing? How do I actually get funds from my clients?”

At this point, startups should consider outsourcing the expertise, adds Johansson: “That’s when they need to look for a partner who can fill that black hole with knowledge and bring them holistic solutions. .”

This means that the complexity of navigating banking regulations in different geographies and the knowledge surrounding the technical infrastructure of transactions can come from the experts.

“Look for a partner who can fill this black hole with knowledge and provide global solutions”

For example, Swedish expense-sharing startup Steven has teamed up with Enfuce to launch a Mastercard connected to its application — and the largest digital wallets.

“We greatly value our partnership with Enfuce,” said Jon Wimmercrantz, Chief Marketing Officer at Steven. “They allow us to launch a payment card as well as digital wallets making sharing expenses with friends and family even smoother in Sweden and a handful of other EU markets in the near future.”

Johansson says she wants Enfuce to be like “a one-stop-shop for anyone who wants to issue a payment method for any type of goods or service.”

“We want to fill that gap for our customers and we want to share our knowledge with them,” she says. “We want them to succeed, because when our customers succeed, we also succeed.”

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