In a recent webinar titled Issuing is evolving: the data points you need to know about, Jim McCarthy, CEO of Thredd, and Erik Howell, co-founder and partner at Flagship Advisory Services, explored the latest trends, challenges, and growth opportunities in the card issuing space.
In this article, we highlight the key takeaways from the conversation, including growth trends in card issuing, investment insights, and how companies can differentiate themselves in an increasingly crowded market.
Understanding the current landscape.
The card issuing market continues to experience robust growth, particularly in developed economies like the US and Western Europe. However, this sector is becoming increasingly complex with the rise of alternative payment methods such as stablecoins, cross-border networks, and domestic schemes. As Erik Howell notes:
"The payments market is fundamentally attractive, even in developed economies, with double-digit growth in card volumes. But with so many new payment rails emerging, navigating this complexity is more challenging than ever."
At the same time, technological advancements and the aftermath of the COVID-19 pandemic have shifted consumer and B2B behaviours. While some trends have reverted to their previous states, others have seen a permanent shift, including the rapid rise of remote commerce.
Investment trends in card issuing.
As the market matures, investment strategies are evolving. A few years ago, fintechs could rely on easy access to capital, but now there is a greater emphasis on building sustainable, profitable business models. Erik highlighted the impact of this shift:
"Five years ago, capital was free-flowing. Now, investors are much more focused on unit economics, profitability, and long-term sustainability. It's no longer just about hockey-stick growth."
This trend is reflected in the slowing pace of new client announcements, with businesses now required to demonstrate clearer paths to profitability. However, despite this increased scrutiny, the card issuing market remains attractive due to its growth potential and strong cash flow.
