Spending across virtually all markets and use cases is increasingly migrating to digital means with cards accounting for the lion’s share of such payments. According to a recent study by McKinsey (Here), card-based payments are expected to drive ~53% of the payments in the GCC by 2026. Broadly, cards can be classified into the following categories:

• Prepaid Cards: The lightest and simplest form of cards. Funds need to be loaded on the cards in advance, and cards can then be used anywhere the card network is accepted. 
• Debit cards: These would most likely be linked to an existing bank account with an adjoining overdraft facility. 
• Credit Cards: These are used as credit instruments, and a credit check is required before these can be issued. These debt instruments generally have an interest component and other late payment fees attached to them. 

The card ecosystem consists of a ‘four-party model.’ It’s the industry’s accepted framework for processing card payments between buyers and sellers. These four parties are:

• Cardholder: The buyer who generally owns the funds and uses the card
• Issuing bank: The bank which is the issuer of the card to the cardholder
• Acquiring bank: The bank which owns the relationship with the merchant (the seller) 
• Merchants: The party who is selling the item to the buyer

SimpliFi is an enabler that empowers any business to issue its own branded cards. The business can custom build its card product with its own set of features which can be used to offer differentiated propositions to its customers or to solve payment-related pain points in its ecosystem (e.g. suppliers payments, payouts to its employees or partners, etc). For a business to issue its own branded, customized cards, there are multiple aspects that need to be taken care of:

• Issuer Bank: Issuer banks would be responsible for providing custody accounts, settling payments with the card schemes and fulfilling regulatory compliance requirements 
• Processors: These are technology platforms that provide tools for businesses to issue and manage their card programs 
• Schemes: These are card networks (e.g. Visa, Mastercard, Mada, etc.) that provide a BIN (essentially a numbering series) on which the cards are issued. The scheme’s logo appears on the card which identifies the network that it belongs to
• Card manufacturers: These are certified players who would be able to print physical cards based on the design provided by businesses and approved by issuing banks and schemes 
• Card tokenization: There are wallet providers (e.g. ApplePay, GooglePay etc) which enable virtual cards to be provisioned through the phone so that transactions can be made on POS terminals in a contactless manner to pay by card as well as online payments.
• Data enrichment: Relatively newer to the cards business, these companies help enrich transaction data by cleaning up and enhancing data coming through the works and adding additional valuable information i.e., merchant logo, merchant location, spend categorization etc.
• KYC service providers: Depending upon the nature of the card program, KYC (verifying cardholder identity) may be needed during card issuance or delivery of the cards which is enabled by such providers. 
• Courier companies: Ensure delivery of cards to the relevant card holders and, in some cases perform verification at the time of delivery. 
• Customer Service: We all would have called our banks for some aspects related to our cards. When businesses issue their own branded cards, they need to also ensure that they provide the necessary customer care channels for cardholders.

In summary, card issuance has multiple technology, compliance, and operations components, and a lot of effort goes into bringing these components together and ensuring these run seamlessly. Therefore, setting up and running a card program requires substantial time and capital investment which is where modern card issuance platforms like SimpliFi can help realize massive savings in time and money for businesses looking to launch their bespoke card programs. 

While launching a card program comes with obvious benefits of driving new revenue streams, streamlining business operations, getting deep insights into cardholder spend behavior, and building loyalty with the target segment (e.g., customers, partners, merchants etc.) it is pertinent to understand the economics associated with running bespoke card programs. 

• Technology costs: Building and running a technology stack (e.g., operations portal, app, etc.), hosting and addressing local regulations and certifications like PCI DSS. 
• Processor costs: Processing costs associated with issuing and maintaining cards, transaction processing, and tokenization.  
• Compliance costs: KYB/KYC costs to onboard businesses and cardholders and for ongoing screening to fulfill compliance requirements and manage risks. 
• Interchange and scheme fee: Transaction costs and revenue share taken by issuing banks and schemes for each transaction. 
• Cost of capital: Where funds are required to be loaded on the cards in advance (e.g. prepaid cards) there are implicit costs around funds being locked onto the cards. Technologies like Just-in-time funding which are made available on the SimpliFi platform, have solved this problem by ensuring that cards are loaded in real-time during the time of transactions, thereby ensuring that funds are not blocked on the cards. 
• Fraud Monitoring: Margins on payment products are thin, which means that fraud can very quickly eat into those margins if not kept in check, thereby necessitating cutting-edge fraud management tools.  
• Card production & delivery: If physical cards are required the cost of production and delivery of cards can add up quickly, especially if a certain percentage of cardholders are not active or generating sufficient transaction activity.  
• Customer care: Providing customer care, especially 24×7 bi-lingual costs can be expensive especially in the initial stages when the card program is scaling up.   

SimpliFi has invested a great deal of time and effort in building a modern card issuance platform along with operations and compliance capabilities with all the partnerships in place for you to launch your card program with ease. We provide: 

• A modern tech platform for you to integrate with once and to expand to additional markets with no additional tech effort, 
• End-to-end card program management capabilities for you to launch your card program efficiently,
• The highest levels of security and complete local compliance, including local hosting, PCI-DSS and other certifications,
• All ecosystem partnerships, scheme and regulatory approvals and card payments know-how to help you launch and scale your program,
• Value-based, simple and fair pricing to allow you to launch and scale your program with limited investment  

Want to find out more? Get in touch with our team today!

Compliance refers to the adherence to a set of regulations and industry standards designed to protect consumers and ensure the security of financial transactions in addition to protecting organizations from all types of risks. This includes compliance with laws such as the Payment Card Industry Data Security Standard (PCI DSS), Data Protection and Privacy Regulations, Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations.

Adhering to regulations and best practices for preventing fraud, suspicious transactions and safeguarding sensitive information is crucial for financial institutions to maintain a good reputation, avoid heavy fines and ensure they don’t become a target by criminals. It is important for companies to stay up-to-date with the latest compliance requirements, and to have robust processes in place to ensure they are meeting them.

Global compliance is the process of a business following all laws, standards, and regulations that apply to them across the globe. Managing compliance for different jurisdictions can be a challenging task for businesses and organizations operating in multiple countries. This is particularly true for industries that are heavily regulated, such as financial services and information technology. In order to maintain compliance, organizations must be aware of and adhere to the laws and regulations of each jurisdiction in which they operate.

The challenge of compliance

Information security is one area in which compliance can be particularly challenging. Different jurisdictions have different laws and regulations regarding data protection and privacy, and organizations must ensure that they are in compliance with all of them. This can include implementing security measures such as encryption and regular security audits, as well as ensuring that employees are trained on proper data handling practices.

Another area of compliance that can be challenging is money laundering and terrorist financing. Organizations must implement procedures to detect and prevent these activities, as well as comply with reporting requirements. This can include undertaking regular risk assessments, conducting proper due diligence on corporate clients as well as individuals, and training employees on how to identify and report suspicious activity.

To manage compliance for different jurisdictions, organizations should have a clear understanding of the laws and regulations in each country in which they operate. They should also have a robust compliance framework in place, including regular training and monitoring to ensure that employees are aware of and adhere to the requirements. Regulations across multiple jurisdictions have a lot in common, however, some details are different. Neglecting or overlooking details can lead to non-compliance and potential legal consequences. 

In summary, managing compliance for multiple jurisdictions can be challenging, organizations face significant compliance challenges when it comes to data privacy, information security, money laundering, and the financing of terrorism, particularly when operating in different countries. They should have a robust compliance program in place, including regular training and monitoring, to ensure they are compliant. Organizations should have a clear understanding of the laws and regulations in each country in which they operate.

SimpliFi, the leading Cards as a Service (CaaS) platform for MENA and Pakistan has a robust and strong compliance framework in place to ensure compliance with laws and regulations across all the countries in which we operate.

We have a dedicated team of experts who stay up-to-date on the latest laws and regulations, as we have implemented a variety of tools and processes to ensure compliance at all times. SimpliFi is fully committed to maintaining the highest standards of compliance with all regulations and standards, and we will continue to invest in the necessary tools and resources to maintain that level of compliance.

Want to find out more? Get in touch with our team today!

A Virtual Card is a payment card that exists solely in electronic form. It consists of a unique, randomly- generated 16-digit number and contains the exact card details as their physical counterparts: expiration date and CVV code. A virtual card mimics the function of a physical card to be used anywhere credit/debit cards are accepted.

How Do Virtual Cards Work?

Although commonly associated with online payments, virtual cards can be used to pay for any purchase – online or offline. When using a virtual card to pay your suppliers, customers, or workers, cards can be used the same way physical cards are used at a point-of-sale terminal or entered online.

Virtual cards can be either disposable (one-time use) or multiple-use.

Virtual credit or debit cards can be restricted to a single-use – which is referred to as disposable virtual cards. In some cases, virtual card numbers are generated for specific purchases with predefined amounts and frequency of use. Once generated, cards can be revoked as soon as a transaction is complete.

For B2B payments, you can set up a virtual card for every vendor or supplier. A virtual card number can be assigned exclusively to one supplier and turned off once a purchase is complete.

On the other hand, multiple-use cards are assigned with an expiration date and can be reused until the date is reached. Multiple-use cards can be used for subscription services or any other type of recurring payment.

Combating Fraud With Virtual Cards – Using Modern Card Issuing

With more companies, like yours, moving their services into the digital realm, fraudsters are figuring out new ways to take advantage of the world of digital payments. No matter what business or industry you’re in, it’s time to give payment security some serious thought with cyber fraud on the rise.

Virtual cards offer an ideal way to keep your business accounts secure and cybercriminals out of your wallet. These cards are becoming increasingly common among consumers, and businesses are now catching up.

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In 2025, the volume of virtual card transactions will rise to $5 trillion from $1.6 trillion in 2020 – Juniper Research

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Virtual cards enable secure online transactions by allowing you to take preemptive measures to combat fraud. Card programs created through modern card issuing providers like SimpliFi provide fine-grained controls on when, where, and how payments can be made.

Just like any card program created on a modern card issuing platform, spend controls can restrict the use of virtual cards. Cards can be created for a one-time payment for a specific amount, time, place, or merchant category where the card is accepted. These controls are verified as transactions take place to prevent attempts of card misuse.

SimpliFi’s modern card issuing APIs can help you design virtual card programs in ways that meet your specific business needs.

Explore how SimpliFi can enable virtual card programs for your different business use cases.

KYC is one of the most important terms in Fintech, and the financial ecosystem at large.
What is KYC, you ask?
In this blog post, we explore what KYC is all about and what fintech owners need to know.

What is KYC, really?

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In Short

Know Your Customer (KYC) is a set of standards used by fintechs, banks, and other financial institutions to verify a customer’s legal identity.

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Let’s explain more…

The Essence of KYC

“Prevention is better than cure”, they say.

KYC lies at the heart of fraud prevention. The main goal revolves around fraud prevention and constraining the ability of some users who fail to meet the given acceptance criteria.

KYC verification procedures allow financial service providers to avoid working with customers involved in money laundering, terrorist financing, or other illicit financial activities.

Serving as a line of defense against fraudulent activities, KYC procedures are often done at the time of customer onboarding – where identity documents are validated before customer approval. In other words, KYC is required any time a fintech accepts a new customer. An identity check will be executed and in some cases, additional customer key personal data and documents will be requested by the financial service provider.

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KYC measurements can be further broken down into three levels: SDD, CDD, and EDD.

Each client is evaluated for possible participation in financial crimes and assigned a certain rating – referred to as ‘Risk Rating’.

KYC Risk Rating

• SDD – Standard Due Diligence (Low Risk)
  This is the lowest level of verification and a faster due diligence process that identifies low-risk clients. When there is little chance of money laundering or terrorist financing, SDD is used.
• CDD – Customer Due Diligence (Medium Risk)
  Customer Due Diligence is a basic analysis of the client and is the most common form of KYC. It is a medium-risk sphere within fintech that focuses on risk assessment and understanding the customer’s transaction habits.
• EDD – Enhanced Due Diligence (High Risk)
  Enhanced Due Diligence, or EDD, is very common with Politically Exposed Persons (PEP), or customers who are more likely to participate in financial crimes – due to the nature of their business/operations. EDD will require fintech firms to collect additional data for high-risk customers’ identity and business operations – data on wealth sources, press coverage of the customer, and more.

Each of these processes is followed by continuous monitoring and transaction documentation – especially in high-security cases.

Without these procedures in place, overseeing financial bodies would have a hard time tracking illicit activities and stopping them.

What are the challenges that you might face in the KYC process?

Given the prevalence of cybercrime and its ever-changing practices, staying in compliance with KYC requirements can be challenging for a fintech startup.

KYC is an ongoing process. A fintech is required to regularly reassess its clients’ risk levels. To protect your fintech business from regulatory sanctions, fraud attacks, and chargebacks, it is crucial to implement a KYC risk assessment for all your customers.

Between due diligence, risk management, and continual analysis of transactions, fintechs spend a lot on KYC compliance annually.

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Global spend on financial crime compliance – including KYC and transaction monitoring – at financial institutions reached $213.9 Billion in 2021.

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Unfortunately, these budgetary restraints aren’t uniform across the board.

Therefore, fintech startups are likely to struggle – especially if new to the market or fundraising.

Modern RegTech solutions help financial firms improve compliance performance by solving regulatory issues quickly, and at scale. When used correctly, RegTech solutions can provide bootstrapped fintechs with the compliance tools they need to adapt to the modern threat and regulatory landscape.

Want to learn more about Regtech? Read our blog post on What is Regtech?

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SimpliFi – Identity Verification in a Box

At SimpliFi, we empower businesses to build new payment solutions while minimizing the effort required to comply with financial regulations. We deal with third parties and local government databases on your behalf to orchestrate end-to-end KYC flows seamlessly, delivered to you via our SDKs and APIs.

We work with regulators and partners to ensure that we are updated with the latest requirements and industry standards to provide you with leading-edge innovation without ever compromising on risks.

Want to learn more about SimpliFi? Contact us today.

Open-loop means any payment method can be used to make payments without having to be part of the system itself. Any card that is widely accepted at multiple merchant stores and locations is considered an open loop card. 

Open loop cards can come in a multitude of forms. Open loop cards can be credit cards, debit cards, gift cards, or prepaid cards. The most common example is a credit card processed by a renowned card scheme, like Visa or Mastercard.

The advantages of open loop cards include high scalability and versatile transactions that are universally accepted. Card holders can make purchases anywhere in the world across multiple merchants where card payments are accepted, including online and over the phone.

When we refer to payment cards, open loop and closed loop, are systems that indicate whether a payment card can be used at online or offline stores other than that of the card issuer.

What is the difference between open loop & closed loop payment system? 

Closed loop payment systems do not offer as much flexibility as open loop.

While open-loop payment systems enable cardholders to make purchases anywhere, closed-loop cards are issued to be used at particular merchant stores only. 

Most store gift or branded cards, such as the The Alshaya Card, can only be used at the issuing stores, limiting purchases to the issuing retailer, and are therefore closed-loop cards.

However, not all store-branded cards are or need to be closed loop, organizations can create all sorts of co-branded payment cards via partnerships with financial institutions or modern card issuing providers like SimpliFi, enabling payment acceptance globally at multiple merchants.  

In 2022, people and businesses continue to use payment cards every day – if not several times a day. Cards, whether physical or virtual, are the essence of digital payments.

However, evolving business models and the emergence of a variety of new business requirements and payment options requires new opportunities and card innovations that businesses cannot find at traditional retail banks.

Luckily, new innovative payment card options have also emerged to meet the demand that can’t be met or satisfied by traditional banks or legacy systems.

These innovative payment card solutions are created and enabled by modern card issuing platforms and APIs with the purpose of powering a new era of flexible payment card options.

But where can you find these platforms? And how can organizations use them to build successful card offerings?

In this article, we’ll show you how to create a successful payment card product for your business and find a modern card issuing platform for your business needs.

Card Issuing: Banks vs. Modern Fintech

When it comes to card issuance, banks are the go-to. They’re the most popular – and for a long time the ‘only’ – issuers of cards in the world.

But fast forward to today, banks are now seen as these big entities with stringent requirements, lots of legal processes, and in many cases not flexible or scalable enough to support some modern-day business use cases.

Even more so, banks can’t offer the flexibility that innovative companies, like Uber, Talabat, and others, need when it comes to payments today.

As a result, companies like SimpliFi had to come up with ways to help companies scale payments by enabling issuing cards faster and providing more controls.

That’s what modern card issuing is all about.

By providing the necessary infrastructure, platforms like SimpliFi, help organizations to build highly configurable payment cards to facilitate and enable innovative payment experiences.

In addition, modern card issuers like SimpliFi, help businesses manage card programs in ways that legacy systems can’t – and probably never will.

In other words, if you want to know how to issue a virtual card or physical card without having to go through bank hassles and approvals, then keep reading.

How to launch a winning payment card program

Having a successful payment card program for your business means your employees can enjoy flexible payment solutions that make their jobs easier, faster, and more efficient.

At the same time, you can also offer your customers card options, whether as your main solution or as an addition to your overall service.

With modern card issuance, the ideas and opportunities are endless.

Here are 9 things you need to do to create, design, and launch a successful payment card program in your company.

The tips included here cover launching a card both to support your employees and internal systems and to provide additional benefits to your customers.

1. Determine your business goals

The first step in making any business decision is to identify your business needs and how you plan to acquire customers. Doing so will help you determine which platform and payment card solution works for you best.

By identifying your goals, you’ll also be able to – at least initially – determine the metrics needed to measure the success of your card issuing program.

2. Identify your target audience and their behavior

One of the most important steps is identifying who the target audience for your card issuance program is.

Is it your employees? Your customers? Both?

If it’s the latter, then it’s best to divide your card program into two layers or segments. You may even divide your larger segments into sub-segments and note down usage policies and specifications for each. When it comes to customers, create a customer profile with demographics and behaviors such as when they make purchases, where they make them, along with the type of businesses they frequent.

3. Identify pain points

The next step is designing your payment card solution to identify the pain points in your business and your customers’ or employees’ pain points.

Doing so means you’ll be able to clearly work on your card solution so that you can clear away bottlenecks and ensure a smooth process later on.

In this section, make sure you write everything down. From pressing problems all the way to minor issues.

Is there something that may hinder your growth in the future? Is there something your competitors are doing that you aren’t and that’s affecting your business?

Write it all down.

4. Identify your geographies and audiences

Once you’ve identified your needs and pain points, it’s time to determine which geographical locations your employees or customers can use your cards in.

You can also set up markets or industries where your cards can be used, spending limits, and other related policies.

Planning your geographies should also include where your target audience is and where you’d like to expand – as a business and service – in the future.

5. Specify the services your cards can perform

Now it’s time to focus on what your card can do and how and where they help customers. This section can focus on specific industries, include ideas, or simply show how customers benefit from your card program.

6. Is your card program part of your business model?

You should definitely consider if your card is part of a larger service or service of its own. Is it part of your business model? And if yes, how much does your card program contribute to your revenues?

This will include both estimates and actual figures that you’ll need to review on a monthly, quarterly, and annual basis.

If the card is the core of your business model, or an essential part of it – then you shouldn’t focus on contributions but instead compare and review how much your card program is in-line with your objectives and overall revenues.

7. Ensure your policies are working well

It’s unlikely you’ll get everything right the first time. So, once you launch your card, you’ll need a couple of weeks of trial-and-error to help you fine-tune your policies.

Use the dashboard offered by your modern card issuing provider to track spending and money movements, uncover where customers and employees are falling short or not completing their tasks. Then fine-tune your card program accordingly.

8. Train employees and customers to use your card

When creating a payment card program, you should always have an onboarding process. Better yet, a quick onboarding video will save you valuable time and will be available for customers and employees to see whenever they want to.

Based on the initial trial, you can refine your onboarding process for how different people can use your payment card.

This is one of the most important steps when launching a payment card program. Failing to onboard customers and/or employees can result in many negative experiences and results.

For employees, failure to correctly onboard them means more time spent by employees, wasted spend, longer processes, lots of frustration, and more.

For customers, a negative experience can translate into bad reviews and less business.

9. Find the right partner to team up with

Last but certainly not least, it’s time to find the right modern card issuing program provider that will meet your requirements and act as a supportive partner to your business.

Launching your Card Offering

Launching a payment card offering on your own is neither simple nor straight forward. For starters, there are a host of regulatory approvals and industry requirements a business has to go through.

Luckily, there are enablers, like SimpliFi, a payment card enabler that helps companies issue cards easily, while taking care of the regulatory headache and requirements.

The magic of seamless, nearly invisible payments is spreading everywhere – on e-commerce sites, investing platforms, music apps, and brick and mortar stores. Everywhere where customers spend their time and money.

Modern card issuing is giving businesses new ways to manage corporate spend, increase employee satisfaction and stay at the heart of customers’ financial lives.

With the help of modern card issuing platforms and their open APIs, cards continue to be a key touchpoint to smarter financial services – catalyzing new commerce, business, and payment landscape.

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For over half a century, the traditional bank-led card programs have dominated the card-issuing landscape.

Cards issued by banks are characterized as one-size-fits-all products with limited features – many of which simply don’t serve the ever-changing needs of consumers and businesses around the world.

Fintechs have begun to emerge to deliver experiences that meet the needs of modern consumers and businesses. They have started building flexible, customized platforms, by embedding payments in their flows such as virtual cards with customized controls.

Modern Card Issuing – Paving the way for more accessible financial services

Today, innovative businesses are looking for ways to issue their own cards, setting up custom payment programs while bypassing traditional, burdensome card-issuing methods.

Features like OEM wallet payments such as Apple Pay, custom spend controls, and rich user data insights are on top of mind.

Pioneered by companies like Uber and IKEA, modern card issuing now allows businesses to have their own configurable payment cards and a simpler way to manage payment programs.

Modern card issuing platforms – that have already established partnerships and direct integration points with issuing banks and card networks – can help organizations build card programs to issue cards in a matter of a few clicks.These platforms are often distinguished by:

Open APIs: A card issuing platform with open APIs enables businesses to develop their own card solution, tailored to specific business needs and logic. When the needs expand to new use cases, open APIs will allow organizations to modify and customize their card experience.

Programmatic Controls: Using modern card issuing, businesses can specify exactly when, where, and how cards will be used – to reduce fraud risks and prevent unauthorized or excess spending. Card spending options can be limited by merchant name/category, channel, location, spending amount, and time of use.

Real-time Transaction Data: Having visibility into transaction data can give businesses access to consumer spending habits including the purchase amount, merchant, location, date, time, and currency. These rich, data-driven insights will provide a full picture of consumers’ behavior.

Still looking to learn more about Modern Card Issuing? Contact us now!

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Modern Card Issuing vs. Legacy Systems

Looking to launch your own card program?

#Tip By SimpliFi:

To be able to launch a successful card program, partner up with a proven partner who knows your industry, and is equipped to continuously maintain, develop and scale your card product offering. Find out where your modern card issuing provider is heading as a business. And last but not least, figure out your partner’s readiness to: a) respond to your different business use cases/scenarios and b) provide the features and capabilities that you might need in the future.

Explore how SimpliFi can help you launch your own card program today.