Card as a Service providers offer financial and non-financial companies a top-to-bottom card issuing solution that is not developed from scratch, but rather modular and standardized, often with similar back ends. Usually the desired card product can be released quite quickly through a set of payment APIs. A huge advantage for non-financial companies is that CaaS providers willingly take over a variety of functions essential to issuing, processing and managing cards, including:

🙋‍♂️ authentication and compliance (3DS, PSD2)
🛡 risk management and KYC – security systems, anti-fraud
⏱ real-time access via APIs
💳 virtual and plastic card issuing, distribution
👨‍🔧 card product configuration and management
📱 digital wallets (Apple Pay, Google Pay, Samsung Pay) and tokenization
👨‍💻 payment processing (open and closed loop)
🤝 payment scheme membership, such as Visa and Mastercard
✅ Electronic Money Institution (EMI) license

These functions may be taken over by a single company with a banking license with processing capabilities, or by a liaison partner company who expertly manages the relationship with an issuer processor, a bank license provider, and other partners such as processors and cloud providers ☁️

With all these financial partners working together to form support teams for non-financial companies, the fintech ecosystem is looking more and more like a team sport rather than a disruptive, winner-takes-all world. CaaS is part of an even bigger embedded finance trend, where, according to Forbes, "collaboration is the new competition". Thanks to the development of digital, open APIs, also payments in the cloud, more companies can be engaged in payments and share the space that banks traditionally occupy. Banking-as-a-Service, Payment-as-a-Service and other embedded finance offerings are the broader picture of the collaboration model 🔥

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