In the rapidly changing world of fintech and payments, issuer processing stands at a critical juncture. Recent market shifts highlight challenges and opportunities, with industry leaders ready to capitalise on trends.
The changing face of issuer processing
The payment processing industry has witnessed significant turbulence recently. This downturn stems partly from delays in launching new programmes, with activation times doubling from 150 to 300 days between 2022 and 2024. Jim McCarthy, our CEO, views these challenges as opportunities for innovative issuer processing platforms. In a recent interview with PYMNTS.com, McCarthy shared valuable insights on the state of the industry and Thredd's strategic positioning.
Regulatory scrutiny: the new normal
The fintech sector is experiencing increased regulatory oversight, marking the end of what McCarthy called the "Wild West" era. This shift has prompted a "flight to quality," with banks becoming more selective in their partnerships.
"There's a new sheriff in town, if you will," he noted. "This regulatory environment has catalysed an evolution in programme management within issuer processing. While turnkey solutions remain attractive for new entrants, maturing fintechs are increasingly seeking control over their revenue streams, moving away from traditional revenue-sharing models.”
Adapting to market demands
Jim highlighted several factors contributing to the current market dynamics:
- Constrained partner banks limiting new programme onboarding
- Historical focus on programme management potentially hindering adaptability
- Shifting client preferences towards greater control over issuer processing operations
Despite these challenges, he remains optimistic about the future.
