Demystifying Cards
A World of opportunity
Imagine your card programme’s up and running, your commercial model is working, and your brand is building. What happens next? One option might be to expand your card programme internationally to reach new markets.
It’s often a conversation many start-ups overlook as they’re focused first on launching and then on getting established. But it may be worth making sure the partners you’re working with – for example, your BIN Sponsor, payment processor and card bureau – can support any foray into new markets.
Of course, it may not happen, but it may be worth future-proofing your card programme in case the opportunity arises and you need to move quickly to scale somewhere else. With the right partners on board, you may be able to land and expand in a new country or territory in days and weeks, not months and years.
Again, it’s about choosing who to work with carefully. Does your BIN Sponsor have a European licence? Can you produce physical cards in the region you’re expanding in? Does your processor offer frictionless international expansion capabilities, without compromising in other areas such as dynamic spending and velocity controls and fraud prevention and monitoring?
Expansion considerations:
Local Switches (technical integration considerations)
Redsys in Spain are in theory are not a domestic scheme but are acquirer processors with a massive share of the Spanish market, representing c.90% of the acquiring transactional volume. If you ar elaunching in Spain as part of a European expansion you will need to consider this as part of the overall transacton flow.
Carte Bancaire (France) and Bancomat (Italy) are always co-branded, meaning they’re also Visa/Mastercard network enabled. As such, if a domestic transaction is being processed it goes through the domestic scheme rails, if it’s abroad (or if the acquirer is not using those domestic schemes) then the transaction is routed to Visa/Mastercard.
All domestic schemes tend to have better acceptance rates in general, as there’s more trust between the parties (issuers, acquirers, issuer processors and merchants) and less suspected fraud.
These domestic schemes work pretty much as a membership association, so in terms of entry requirements normally you’d need to be sponsored by a member and have a locally incorporated branch of your company.
SHVA is the name given to the local switch/network in Israel, who dominate Israeli card payments, so much so that Mastercard acquired a stake in them!
Further information regarding payment switches and gateways can be found here.
As well as local and domestic arrangements for these types of different switches and acquiring arrangements, local regulatory considerations must be well understood. Whilst passporting arrangements cover much of Europe, it’s a myth that domestic, per country regulations do not apply.
It is vital that when considering launching or expanding into a new geography that you are aware of the domestic nuances of that market, with regulation and compliance being paramount to that knowledge gathering.
Our partner Lendable had this advice:
Our key building blocks when considering launching a card programme in a new geography are as follows:
Evaluate what needs to be added to the product offering for a launch in a new geography
Licensing requirements – to be applied for and obtained, or to work with a partner who has the right licensing requirements already in place
Commercials – Lendable have an established P&L so how this fits the new market will be considered
Evaluate competitive environment – APRs for credit card facilities, Cashback facilities, market dynamics and size of opportunity How Marqeta can support this expansion given our growing global presence
