How to Evaluate a Card Issuing Partner

The card issuing partner you choose for your card program can have a big impact on your go-to-market timelines, product roadmap, economics, and customer experience.

The right card issuing partner will work with you to structure your program, meet your launch milestones, and manage the daily operations needed to run a successful program. But it can be hard to find a great long-term partner.

The two common reasons why companies have a hard time evaluating providers:

1. They don’t know what to look for in a card issuing partner
2. They’re putting too much weight on features and not enough on flexibility and support

This guide will help you evaluate card issuing providers and the characteristics to look for in a long-term partner.

Key takeaways

• There are two common types of card issuing partners used by fintechs: issuer processors and Banking-as-a-Service providers.
• Issuer processors are the interface to the card networks and orchestrate the millions of daily transaction messages. A BaaS vendor boxes up the services of an issuer processor, issuing bank, and other banking features in one package.
• When evaluating a card issuing provider look at factors like the strength of their relationships with the banks and card networks, how much support they provide, and the degree of customization the provider can offer you.
• Some card partners can help you quickly launch a product into the market but can’t scale with you as your needs evolve. Look for providers that can stay with you for the long haul instead of risking re-evaluations and migrations.

What is a card issuing partner?

Card issuing partners help companies build, launch, and run their own card programs. There are two common types of card issuing partners:

• Issuer processors
• Banking-as-a-Service providers

Issuer processors have direct connections with the card networks. They authorize or decline transactions and handle clearing and settlement. They’re the interface to the card networks and orchestrate the millions of transactions that happen on a daily basis. Issuer processors can also provide card fulfillment through card manufacturers partners, as well as handle the processing of cardholder disputes. This includes modern companies like Lithic and Marqeta, as well as legacy providers like FIS and Fiserv.

Some issuer processors have direct relationships with the issuing bank (typically called a sponsor bank) and offer program management services. When companies act as their own program manager, they own the relationship with the sponsor bank. Read this guide to learn about the differences between program manager and processor-only relationships.

Banking-as-a-Service providers integrate program management and issuer processing. As the program manager, they own the sponsor bank relationship and act as middleware between companies and banks. Most BaaS providers only offer basic card issuing services. Companies in this bucket include Treasury Prime and Unit, which rely on Marqeta and Visa DPS for issuer processing.

Common challenges with card issuing partners

Whether you choose an issuer processor or a BaaS provider, you should be aware of the red flags to look out for:

• Lack of important functionality
• Features that don’t work as described
• Inflexible platform that can’t be customized to your use case
• Unexpected changes to the timeline or missed due dates
• Inability to keep up with your pace of development
• Issues with the underlying sponsor bank or card network
• Taking shortcuts on compliance and legal
• Not treating your business like a priority or non-existent support

Some of these challenges become obvious only in hindsight. For this reason, we recommend reference calls with existing customers, reading case studies, and asking investors and peers what it’s like to work with them.

How to evaluate a card issuing partner

Deciding on the right card issuing partner for you depends on a number of factors, including your company stage, use case, industry, desired functionality, and whether or not you want to manage your own program. And that’s just scratching the surface — there are many other factors you may want to consider.

For example, a company offering a card in the fleet/trucking space may care a lot about level 2 and level 3 payment data. A company looking to offer a debit card to students will need a provider and bank comfortable issuing cards to minors. A larger company that wants to manage their own card program may limit their search to processor-only providers.

Here are 13 factors you can use to evaluate a card issuing partner, along with some sample questions to help you gather the right information.

1. Product Usability / APIs

Try to get a sense of what it’s like to build before you commit. Ask your developers to look through the provider’s API documentation and explore their sandbox. Some companies have proof-of-concept (POC) solutions so you can build an MVP or pilot a program for little or no cost.

Some questions to consider:

• Is the provider’s technology easy to work with?
• Can you try it before you buy it?
• Do your engineers like working with it?
• Can you easily integrate with other tools?
• Do they offer any software development kits? If so, in what language(s)?

2. Use Case

Don’t make any assumptions that a provider can support your use case. Cards programs vary widely and just because a website says it’s possible doesn’t mean it’ll work the way you need it to. Walk through your use case operating expectations to ensure you and the card issuing partner are on the same page.

You’ll also need to confirm that their banking partner can support your use case. It’s not uncommon for a card provider to give you verbal affirmation only to have their bank partner decline your program during the due diligence process. This is especially true if you operate in an industry that’s seen as higher risk, such as cannabis or cryptocurrency.

Some questions to consider:

• Do they have previous experience launching this type of product?
• Will their bank partner have a problem with this use case?
• Has their bank partner worked with companies in your industry before?
• Can you speak to any customers that have recently launched their program?

3. Program Flexibility

Some providers only offer managed programs, meaning they only support card programs where they act as the interface to the underlying sponsor bank. If your product doesn’t fit into the program manager and sponsor bank’s pre-approved construct, you might not be able to launch your product.

Other companies won’t offer any program management services, meaning you’ll have to take on all card program management responsibilities. They will only act as the processor for your program’s transactions.

To get a better idea of program flexibility, ask the provider questions about the sharing of responsibilities and whether any aspects are negotiable.

Gauge the bank’s expectations, too. Some banks prefer to handle all of the transaction monitoring responsibilities while others could expect to share the responsibility.

Some questions to consider:

• Do you want a program manager or a processor-only relationship? Can they do either?
• Which sponsor bank(s) do they use?
• What types of BINs do they support?
• Do their BINs support tokenization?
• What kind of card controls do they offer?
• How many different use cases do they support?
• Do they support pre-paid and/or postpaid funding models?

4. Features and Functionality

Some financial technology terms mean very different things at different companies. For example, companies may say they offer card controls but allow minimal spend controls. You might not be allowed in the authorization stream or be able to control every part of the transaction.

Get granular when talking about functionality and ask specific, technical questions. Bring your head of product or engineering to discuss your use case and expectations for how the product will work.

Some questions to consider:

• Can they provide L2 and L3 transaction data?
• What does their chargeback management process look like?
• What is their chargeback recovery rate?
• Can you create, manage, and view the status of cards via API?
• Can you create cards in real-time?
• Will they update you on authorization and settlement statuses in real-time?
• Do they give you access to reports and raw data?
• How granular is the reporting? For example, can they offer detailed settlement and interchange reporting?
• Can they fund cards in real-time?

5. Product Flexibility

Can you bring your own vendors and third-party tools, e.g., money movement partner, ledger, rewards, loan servicing (if credit), etc.? Or are you required to use their proprietary tools and selected partners? Some companies will say they are “vendor agnostic” but won’t have the proper integrations or infrastructure to truly allow it.

Some questions to consider:

• Can you bring your own sponsor bank?
• Can you bring your own KYC tools?
• Can you bring your own transaction monitoring tools?
• Can you bring your own ledger?
• Can you bring your own loan management system?

You get the idea. The best providers will offer built-in tools and also allow you to “bring your own” vendors.

6. Networks

Card networks offer different features and functionality, but not every card issuing provider will support every network. If a company has special incentives with a network, they’ll want to make sure their card partner can issue on it.

Some questions to consider:

• What card networks do they support?
• What card network products do they support?
• Which payment controls do they support on each network?

7. Bank Partner

Given the disruptions and increased scrutiny in the BaaS space, some companies are now asking whether or not the provider has more than one bank partner to avoid any unforeseen disruptions.

Similarly, evaluate the flexibility of a provider’s issuing bank to support certain use cases and their willingness to support novel products.

The issuing bank should be reputable and easy to work with. If you already have one you’d like to use, ask if you can bring your own.

Some questions to consider:

• Do they have a good relationship with their bank?
• What are the required terms? (e.g., reserves, minimums, revenue share, fees, etc.)
• How does your bank partner deal with common problems like disputes, exceptions, or disagreements regarding card program operations?
• If you need to move your program to a new bank, what is the migration process?

8. Card Types

Ask the provider about supported card types like debit, credit, and/or prepaid cards, as well as virtual, tokenized, and physical card options.

For physical cards, your card issuing platform might have pre-integrated card manufacturing and card fulfillment partners. Ask the provider how many manufacturers they work with, whether or not they’ve been shipping physical cards on time, customized options (e.g., custom designs, metal cards, QR codes, etc.), and the timeline for receiving these customized products.

Here are a few resources to help guide your questions:

• Guide to digital wallets and tokenized cards
• Questions to ask virtual card providers
• Guide to consumer card constructs

9. Implementation support

Most providers offer implementation support, but this can mean very different things at different companies. Implementation support can range from self-serve options to a dedicated implementation manager who works with you through every step of the process.

Take time with this one and ask several questions:

• Will you have your own implementation manager?
• How long does implementation take and what does it involve?
• What responsibilities is the partner handling and what will you be responsible for?
• Who handles the set up of the card program?
• Is support with due diligence and reviews provided?
• Do they have any templates or materials to guide you through implementation?

10. Post-implementation support

You also need to know how the partnership will work post-implementation. A good long-term partner should provide you with:

• A dedicated customer success manager
• Assistance resolving technical issues
• On-call engineers for urgent issues
• Access to subject matter experts
• A dashboard to review and manage card accounts, controls, and payments

11. Pricing Models

Pricing models vary widely across providers. Ask about the gross versus net share on interchange revenue and whether there are platform fees or volume minimums. Make sure you understand what they charge for setting up the program and for issuing cards.

Questions to consider:

• How do they structure pricing?
• Do they offer different volume tiers?
• How will their pricing and incentives change as your program scales?

12. Product roadmap

Evaluate the momentum of the card partner’s company and what it’s building toward. Are they still updating their products and releasing new features? Which use cases or market segments are they focused on? These answers will help you determine long-term partnership potential.

For example, if you launched a card program back in 2010, you’d be managing it through a dashboard and using an interface to conduct actions like creating and issuing cards or checking a user’s balance. Most companies now enable these actions programmatically via an API — unless they haven’t been keeping pace.

A good long-term provider evolves as you evolve, releasing new features and functionality that match where the market is going. It’s surprising how many fintech infrastructure providers still offer products and services originally designed in the ’80s.

13. Customers

Do they have any referenceable customers you can speak to? This might seem obvious, but it’s a huge red flag if a provider doesn’t have any customers to note or doesn’t want you to talk to any of their customers while you’re evaluating.

But there are some exceptions to this rule. For example, if you’re a seed stage company asking to talk to their biggest customer during your evaluation process, you’ll likely hit a wall. But a reference call is a standard request for a larger company with a mature program.

What makes a good long-term card issuing partner?

• They will treat your business like a priority.
• Partner with you to build solutions and explore edge cases.
• Support a variety of different use cases and pivot with ease.
• Give you access to their subject matter experts and allow you to ask their product and engineering teams questions when you need a second opinion.
• Be flexible and make it easy to integrate with other tools. Good partners know it takes a village (of APIs) to build a card program.
• Provide clear, proactive communication. When something goes wrong, they’re the first to find out and will inform you. When there’s a mistake, they’re vocal about what they’re doing to fix it.
• Consider your requests as they build their product roadmap. (Visionaries are great but only if you’re part of the vision.)
• Have reliable relationships with issuing banks and card networks.
• Offer great customer and technical support with best-in-class advice for handling operational issues.
• Deliver on your go-to-market timelines, when appropriate. When you’re up against the clock, it’s good to know that they can keep up with your pace.

Using these factors and questions, adjust your evaluation process and investigate the areas where common issues arise. If you’re unhappy with your current provider, you can also use this list to re-evaluate what you’re looking for in your next card issuing partner.

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