How ‘credit cards as a service’ is helping banks charge ahead

Economic uncertainty often hits community and regional banks the hardest. Regulated and taxed like big banks but with lower reserves and more precarious funding bases, they  are much more vulnerable to economic and social turmoil.

These banks can take some steps to bolster their bottom lines by finding new ways to serve their customers and attracting new ones — for example, issuing a credit card. But credit card programs can be prohibitively time consuming and complex to launch and service, so many community and regional banks and local credit unions have been shut out from these offerings.

That’s where Brim Financial, a Toronto-based fintech, comes into play. For the past seven years, the company has been laser-focused on helping banks of all sizes — as well as fintechs and large brands — modernize their credit card infrastructure. Brim provides credit card platforms as a service, meaning it delivers an end-to-end solution that equips any company to issue a credit card. A new strategic partnership with Mastercard will embed its digital capabilities within Brim’s platform.

The “as a service” business model has been gaining traction as the digital acceleration and rising consumer expectations for ease and simplicity collide with legacy infrastructure in financial services.

Brim’s modular customizable platform can significantly accelerate the deployment of a credit card program for issuers of any size from months to weeks, fully empowering the institution to run and evolve that program according to their customer and market needs, says Rasha Katabi, Brim’s CEO and founder. "This creates a more competitive ecosystem, where banks, brands and fintechs can better serve their customers."

'An impossible task'

For an issuer, a credit card is more than a product; it’s a full-fledged business. A large financial institution employs multiple teams — each often using its own dedicated software — to market and distribute the card, staff the call center, assess customer risk, and oversee day-to-day settlements and payments, among other responsibilities.

Many banks lack the technical capability and staff to get this mammoth undertaking started. Community and regional banks often rely on a strategy called white labelling — when a third-party contractor hosts the technological infrastructure and handles ongoing operations like issuing cards and collecting payments. While white labelling reduces the burden of manpower, the result is an isolated product, detached from the rest of the bank’s services. If a customer calls the bank with a problem, employees can’t access their card data, because it’s walled off in the contractor’s server.

“But a bank doesn’t have to be tiny for this to be an impossible task,” Katabi says. Large institutions rely on legacy providers, focused on “card processing” to set up their programs, which doesn’t provide any flexibility to adapt to ever-evolving digital evolution in customer’s payment and banking needs. 

“Banks can see these opportunities and are striving to be competitive,” says Hunter Woolley, Mastercard’s executive vice president for North America Business Development. “We want to empower these community and regional institutions to have an outsized impact on their communities while helping larger banks innovate with speed.”

The a la carte credit card program

For Katabi and her team, broadening access to these cutting-edge features has been the top priority. “Everything a customer would expect, whether they're a small or large business or a consumer, is on this platform,” she says. In addition to industry standards like online enrollment, instant issuance, mobile wallet provisioning and rewards programs, Brim also offers newer features like credit-to-term loan conversion, the ability to store card information with frequently used merchants via a mobile app, and custom issuer wallets.

The bank can customize its capabilities based on what Katabi calls a “full a la carte menu.” Maybe the in-house team opts to process payments but not adjudicate disputes, or they have enough staff to oversee written communications but not a call center — they can delegate the rest to Brim.

Although Brim builds and hosts the software, the entire suite of cardholder services is embedded into the bank’s existing website. “It behaves like a single digital environment,” Katabi says. In addition, customer service staff can view real-time account details — also in the bank’s own digital platform. “If someone calls about their mortgage, but then tacks on a question about their credit card, the agent can solve their problem in one call, without having to contact us,” she says.

Thanks to the strategic partnership, Brim’s customers benefit from Mastercard’s digital capabilities. Brim has already incorporated Mastercard’s open banking capabilities into its platform, so customers can immediately experience faster account opening and benefit from more streamlined underwriting by proactively sharing their data.

Using Brim’s service, a bank can focus on what’s most important: nurturing its relationship with clients. “We’ve seen it again and again,” Katabi says. “The card becomes the customer’s go-to payment instrument because it does everything they need so seamlessly. That strengthens their loyalty to the product — and the bank. It’s very powerful."