A Practical Guide on How to Launch a Credit Card Program

Launching a credit card program used to be an option only for large banks. Today, technology has made it more accessible for many types of companies. A branded card can help a business improve customer loyalty and create new revenue. However, the process can still seem complicated.

This guide will explain the steps for how to launch a credit card program in a simple way. We will look at the modern options available and the key decisions you need to make. This information will help any business, from a startup to a large corporation, understand how to create their own card program.

The Old Way vs. The New Way

Traditionally, a company that wanted to issue a credit card would partner with a major bank. This is called a co-branded program. The bank would handle all the financial and legal work, and the company would handle the marketing.

This method had some advantages. It was simpler because the bank managed all the complex parts. However, it was also slow and expensive. The company had little control over the card's features and the user experience. The process could take a long time, often years. This traditional path is often not a good fit for modern companies that need to move quickly.

The new way uses modern financial technology, often called "Banking as a Service." This approach lets companies work with specialized technology providers instead of a traditional bank. This gives the company more control, allows them to launch faster, and build a program that fits their brand perfectly.

Key Steps to Launch a Credit Card Program

Here are the most important steps to follow when you want to learn how to launch a credit card:

Know Your Goal and Audience

Before you start, you must decide what the card is for. Is it for customer rewards, employee expenses, or B2B payments? Who will be using this card? Knowing your purpose and your target users will help you make all the right choices for your program.

Choose a Technology Partner

This is the most important step. You need a technology partner who can provide the necessary system for issuing cards. This partner connects your company to a payment network (like Visa, Mastercard, or Discover). Look for a partner with reliable technology, a good history, and a strong plan for legal compliance. A good partner will also have a relationship with a bank that has the license to issue cards.

Design the Card and the User Experience

Your card program should reflect your brand. This includes the look of the card itself and the digital experience. Users should have a simple way to manage their card through a mobile app or website. A good user experience is key to getting people to use the card.

Plan for Security and Rules

Compliance is a legal requirement. Your program must follow all financial laws, including those for knowing your customer (KYC) and preventing money laundering (AML). Your technology partner will help with a lot of this, but you must still be aware of the rules. You also need a plan to prevent fraud and protect your users.

Integrate and Launch

Once you have made all your plans, you will connect your system with your partner’s system. This is done using technology called APIs. With a modern partner, this part of the process is very fast. You can go from an idea to a working card program in a few months. After testing, you can launch the program for your customers.

PhotonPay: A Partner for Card Issuing

Modern digital fintech infrastructure providers like PhotonPay make the process of launching a card program much simpler. PhotonPay provides the technology to help businesses build secure and compliant card programs.

Here are some features of PhotonPay:

Global Card Issuing: You can instantly issue multi-currency cards. These cards work for online and in-person purchases on the Mastercard and Discover® networks. This helps businesses that work with international customers or contractors.

Dedicated Card BINs: PhotonPay offers dedicated Card BINs from the Discover® Network. This helps ensure payments are stable and reliable.

Flexible Use Cases: The platform supports many types of spending, including Media Buying, B2B Procurement, and payments for freelancers.

Expense Management: You can set rules for spending on each card. The system also automates tasks like transaction records and expense reports, which makes accounting easier.

Security and Compliance: PhotonPay has the highest level of payment security with PCI-DSS Level 1certification. It also uses 3DS 2.0 authentication to protect transactions.

Physical and Digital Cards: The platform offers physical commercial cards and supports digital wallets like Apple Pay and Google Pay for convenience and extra security.

FAQs about How to Launch a Credit Card Program

What is the 2/3/4 rule for credit cards?

This informal rule suggests limiting your new credit card applications to a specific number within a certain timeframe to maintain a healthy credit score. While the exact numbers can vary, a common version is no more than two new cards in two years, three in one year, and four total. This helps avoid looking like a risky borrower to lenders.

Is a credit card profitable?

Yes, for the issuer, a credit card program is highly profitable. Revenue is generated from several sources, including interchange fees (a small percentage of every transaction), interest on balances carried by cardholders, late payment fees, and annual fees. These revenue streams often outweigh the costs of running the program.

How do collection agencies work?

Collection agencies are third-party companies hired by creditors to recover overdue debts. If a cardholder fails to make payments, the card issuer may sell the debt to a collection agency for a fraction of its value. The agency then contacts the cardholder to collect the full amount.

How much does it cost to start a credit card?

The cost varies greatly. Partnering with a traditional bank can cost millions in setup fees and minimums. Using a modern card-issuing platform is more affordable, often involving a combination of setup fees and per-card or per-transaction fees. The total cost depends on the program's complexity and scale.

Your Path to a Card Program

You no longer need to be a bank to create your own financial product. Modern technology has made it possible for many companies to launch a branded card program.

By working with a technology partner like PhotonPay, you can successfully navigate the complexities and get your program to market. The answer to how to launch a credit card is now a clear, manageable process for any business ready to innovate.

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