How to Issue Prepaid Cards: Key Steps from Inception to Launch

What is Card Issuing?

Card issuing is the process of enabling businesses to issue credit, debit or pre-paid cards to their customers either in the form of physical or virtual cards. The reason why many organizations look into how to issue prepaid cards is that it provides a valuable growth and retention strategy and it is a simple and accessible way for businesses to include financial services as part of their offerings.

Rapyd’s 2020 Singapore Fintech Festival videos on this and other related topics.

How the Process has Changed in the Past Decade

In the past, card-issuing was usually the product of a partnership between a local bank and a well-known brand or large business -such as a soccer team or an airline- in which new cards would be issued with the brand’s logo. This arrangement was a marketing program from the bank’s side and a revenue sharing program from the brand’s. The product would be virtually identical to the bank’s regular card offerings, only now it had the benefit of added access to the partner brand/business’ own customer base.

However, one of the biggest limitations of this scheme was that it was far out of reach for smaller players that wanted to become prepaid card issuers. This is in large part due to high network and processing fees, bureaucratic and infrastructural barriers, and the geographic limitations imposed on partners that made maintaining long-term relationships of this nature difficult and costly. Each integration was also highly customized to a particular enterprise partnership, so it was practically impossible to replicate and adjust for other partnerships at scale.

But now, thanks to emerging technology platforms that are assisting in the democratization of card issuing, businesses of all sizes are trying to unlock previously unreachable ecommerce opportunities through strategic partnerships.

How to Become a Prepaid Card Issuer Now?

So you’ve already decided that you want to add financial services to your business offering portfolio. Before you start issuing your own cards, let’s go over the basic resources you’ll need in order to determine whether or not your business is ready:

Issuing Capabilities

Do you own a card printer? Are you compliant with local legislation for major card issuers? If your business isn’t in the financial sector already and doesn’t have the built-in technical or financial infrastructure to issue cards, the best recourse would be to partner with a card-issuing platform that does, such as Rapyd Card Issuing.

That way, rather than build out all the necessary capabilities from scratch, businesses can focus their resources on their strengths and core offerings while outsourcing the card creation process to specialists who can do the job within an end-to-end platform that can be adapted to the financial needs of every organization.

 Additional Financial Services

Very rarely are customers’ needs limited to the usage of a single card. In fact, they may require added financial services such as collections, disbursements and ewallets. That’s why companies need to go deeper and anticipate the evolving needs of their client base while also finding ways to deliver on those demands.\

Merchants who don’t wish to build out their own payments infrastructure should choose a card-issuing partner that offers an all-in-one payment processing platform with a comprehensive catalog of financial services.

Get Inspired: Examples of Successful Prepaid Card Programs

Thanks to the evolution of card issuing technologies, many innovative and creative use-cases of how to issue prepaid cards are flourishing, enabling businesses to:

Build New Products:

• Revolut built a financial mobile app with a card attached to it. The presence of the physical card not only opened up the avenues in which users can transact but also significantly increased brand loyalty within its client base.

Provide Financial Services to Current Users:

• Grab, the Singapore-based ride-share and delivery service expanded into financial services, first with a virtual wallet first and then with the Grab card. The card’s balance can be used to pay anywhere online or offline where Mastercard is accepted, which is in over 28 million stores worldwide.
• Online marketplaces are issuing their own branded cards and making them available to the smaller merchants that sell on their platforms, resulting in lower dispersal fees for everyone and immediate access for said merchants to their revenues and working capital that they can reinvest into their ventures.

Reduce Fraud and Improve Convenience for Gig Workers:

• Grocery, restaurant and other delivery services can issue cards to their gig-workers to use for their delivery purchases. Funds can be pushed to the cards based on the amount of the order and can even be restricted for exclusive use in specific supermarkets, restaurants, and brick-and-mortar stores for added security and as a built-in deterrent against employee fraud.

Grow Transaction Monetization and Loyalty:

• Since Apple has gotten into the payments business, one in ten card payments go through the ApplePay system, showing that brand loyalty can also be big business if channeled correctly.

Differentiate Themselves via Alternative Finance:

• Klarnas’s partnership with the payment platform Marqeta is a prime example of a modern, alternative finance partnership.  Klarna’s notorious “buy now, pay later” value proposition is made possible by using Marqeta’s platform to issue virtual cards that can be topped up over time in order to offer its shoppers a truly seamless shopping experience.
• LytePay and Era teamed up to create the first-of-it’s-kind business wallet and payment card for Southeast Asian real estate agents, with instant access to sales commissions, insights into income data, tracking of business and marketing expenses, and the ability for agents to spend their commissions anywhere Mastercard is enabled.

Thinking of Launching Your Own Card Program?

Get started the right way with our free guide: Five Strategic Questions to Answer Before Launching a Global Prepaid or Debit Card Issuing Program