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Credit Card Operating System vs. Credit-Card-as-a-Service
The evolution of credit card technology has made it possible for companies to create their own credit cards more easily, more quickly, and less expensively. Not only can businesses create customized credit cards that cater to their unique needs, but they can streamline the process from start to finish.
Today, most businesses can partner with service providers to launch self-service or fully managed credit card programs. Technology makes it possible to streamline multi-faceted credit card programs, including everything from underwriting to compliance, security, and more.
You may be familiar with credit-card-as-a-service providers, but as business needs evolve and the landscape changes, credit card operating systems (ccOSs) are gaining momentum as the preferred model. This article will delve into these two options for launching and managing credit card programs and explore the differences between the two.
Credit-card-as-a-service (CCaaS) platforms enable non-financial businesses and fintechs to embed credit card payment offerings into their brand experience. Credit cards are a heavily regulated and complicated payment instrument, requiring proper licensing, existing financing, and often, a substantial in-house team. CCaaS platforms bring together components of the credit card ecosystem so brands can offer embedded credit card experiences without managing all of the backend requirements on their own.
A CCaaS partner provides solutions to businesses that want to issue credit cards. Platform providers can offer one or several components of credit card mechanisms and management, from credit licensing and processing to financing, compliance, and fraud prevention.
The CCaaS model has some drawbacks and limitations. Many CCaaS platforms rely on older legacy technology, and some only offer piecemeal solutions. Others misrepresent offerings as “credit cards” when they are only charge cards, or they offer “commercial credit cards” that do not have the full capabilities of true commercial cards.
Many businesses may find that working with inflexible platforms and cumbersome solutions makes it even more complex, expensive, and time-consuming to launch and scale credit card programs. What’s more, businesses may have limited control over certain elements of their credit card program like pricing, branding, and rewards.
Another big challenge is integration with other business systems — things like accounting software, ERP systems, e-commerce platforms, and CRM systems. Compliance can also be a sticking point. Compliance with PCI DSS and other regulations and standards can be arduous, and not all CCaaS providers manage compliance from soup to nuts. Ultimately, it’s the responsibility of the business to ensure their credit card programs are compliant, which can be a large burden for smaller businesses to undertake.
Credit card operating systems (ccOSs) are similar to computer operating systems in that they support basic functions, like executing applications and process management. Just as macOS acts as a translator between the user and the computer, a ccOS acts as a translator between a business and the complicated credit card ecosystem. It eliminates the need for expert-level competency and makes navigating the complexity of credit card programs brutally simple and elegant.
From a technology perspective, it provides a turnkey solution, including end-to-end cloud infrastructure and program management services for building, launching, and scaling consumer and commercial credit card programs. A ccOS takes on the heavy lifting for:
The main benefit of using a ccOS is that it acts as a one-stop shop for businesses to build, launch, and scale credit card programs. Not only does a ccOS act as a translator between businesses of all sizes and the technology that underpins credit card programs, but it also helps those businesses translate credit card programs into unique business benefits.
With the built-in expertise of experienced credit card teams that have decades of experience launching and running credit card programs, a ccOS businesses create bespoke credit card programs to meet their unique needs. Businesses can tailor their program to drive behaviors that benefit the core business, including acquiring more customers, selling more products, and building loyalty through rewards.
While there may be some overlap between the CCaaS and ccOS models, businesses need to understand how they differ to make the best choice that supports their objectives. We’ve outlined the core differences in the table below.
Overall, ccOS offers credit card issuers greater control, customization, integration, scalability, flexibility, and cost-effectiveness than CCaaS. Most importantly, it delivers better credit card experiences to cardholders, helping businesses garner top-of-wallet status, cardholder loyalty, and the ability to drive desirable behaviors that boost the core business. These benefits make ccOS an ideal solution for businesses that are looking to build and grow their credit card programs over time but may not have the in-house capabilities to do it alone.
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