Exploring market dynamics, challenges, and opportunities in card issuing and processing.
The Thredd team
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.
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.
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.
Compliance has become a key focus in the card issuing industry, especially in mature regulatory environments such as the EU and UK, where frameworks like Strong Customer Authentication (SCA) are mandatory. As Jim McCarthy pointed out:
"Compliance is the fastest way to avoid getting shut down. You can’t ignore it. The tech is important, but compliance is fundamental to sustaining growth."
In today’s market, technology alone isn’t enough; businesses must ensure that they are meeting rigorous compliance standards. Without a robust compliance framework, businesses risk falling short in terms of security, customer trust, and operational efficiency.
The payments space is ripe with new opportunities. One of the most promising areas for growth is embedded payouts within SaaS platforms. Many software providers, especially those catering to small and medium-sized businesses (SMBs), are starting to integrate payment solutions directly into their platforms.
Erik mentioned this shift, noting:
"SaaS platforms are increasingly offering embedded payouts, allowing businesses to automate vendor and employee payments. This represents a huge opportunity in Europe, where the current systems are still quite manual and fragmented."
This new model is poised to transform the SMB landscape by streamlining payment processes and reducing friction. The ability to offer seamless payouts directly through a SaaS platform opens new revenue streams for businesses and enhances the user experience.
The future of card issuing is likely to be shaped by several key trends, including increased automation, AI integration, and the rise of alternative payment methods. As Jim McCarthy noted:
"It's not just about moving money onto cards. It's about creating new ways to move money quickly, efficiently, and securely, with a focus on seamless user experiences."
To stay competitive, card issuers need to embrace emerging technologies like AI, strengthen their compliance capabilities, and develop new products that respond to changing customer expectations.
In such a competitive market, differentiation is key. Erik emphasised the importance of providing value-added services beyond the core card issuing functionality:
"What really matters is trust, support, and a future-proof roadmap. Technology is a hygiene factor now; what sets you apart is your ability to support clients and provide innovative solutions in the long run."
Businesses must look beyond the technology and focus on the overall service experience. Whether it's through exceptional customer support, seamless onboarding processes, or a clear path to differentiation, these are the factors that will ultimately decide which companies thrive.
The card issuing market is evolving, with new payment technologies, regulatory challenges, and shifting consumer expectations reshaping the landscape. While the opportunities for growth remain significant, companies must be agile and focused on compliance, risk management, and innovation. By staying ahead of these trends, businesses can unlock new growth avenues, differentiate themselves in the market, and position themselves for long-term success.
Need support implementing these strategies? Get in touch with our team to explore how Thredd’s solutions can help your business scale securely and efficiently.
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