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Why Switch to a New Age Credit Card System?

Aug 8, 2023

The credit card industry in India is booming. Currently, there are 8.5 crore* credit cards in circulation, a substantial jump from 7.5 crore just a year ago. 

But only 5%** of the population has a formal credit card. 

This is a huge opportunity for credit card issuers. Creating differentiated, customizable credit card programs for diverse customer segments with loyalty, security, and customer experience factors stitched in will give issuers the needed latitude to tap into the space. 

To create a market-winning credit card program, issuers require new age credit card solutions robust enough to accommodate innovation, scalability, and cost optimization. Only then can they navigate complexities in issuance, operations, and recovery.  

Before getting into how a new age credit card solution can help you, let’s take a quick look at the tech-enabled evolution of credit cards.  The journey will help you understand the extent of tech enabled progress and why issuers need to be future-ready with new age credit card solutions.  

Credit Card Evolution  

Credit cards have evolved significantly from simple charge plates to sophisticated plastic cards with embedded chips and contactless technology.  Here is a quick glimpse into the journey.

With technological advances propelling the card payments landscape forward, banks need to be future-ready with cutting-edge solutions capable of withstanding and accommodating upgrades and innovation. Legacy systems that limit an issuer’s ability to launch and support modern credit card products and experiences must be upgraded. 

Need for a New Age Credit Card System

Legacy credit card systems are mostly built as monolith architectures with limited agility and flexibility. This inhibits their ability to support the launch of futuristic products and services. Their siloed data architecture and batch-based processing approach result in operational challenges, higher cost of operations, and relatively longer GTMs. Consequently, issuers become limited in the differentiated product experiences they can offer to consumers.  

To attract new age consumers, issuers end up building custom middleware applications that offer functionalities that the legacy credit card systems lack. Further, maintaining these rigid applications is challenging, as they require specific skill sets and do not offer interactable user interfaces. Their high operations cost and limited agility are among key signs that prompted several banks to upgrade to modern and efficient solutions. 

To resolve the limitations mentioned above and deploy intuitive user interfaces, optimize workflows, real-time updates, enhanced security measures, and a plethora of personalized options, issuers have started looking out for a comprehensive modern credit card management stack.  A stack that serves the new age customer requirement and does not cost dearly.

Investing in a new age credit card management system can yield significant benefits to issuers, which we will break down further below. 

Benefits of Upgrading to New Age Credit Card System 

A new age credit card system offers a plethora of benefits that directly impact a business’s success. 

  • Enhanced Customer Experience: Personalized and user-friendly interfaces ensure increased customer adoption and continued usage. 
  • Seamless Integration: Smooth collaboration with other systems and technologies for a cohesive banking experience. 
  • Cost Effectiveness: Reduced operational costs and resource optimization through automation and cloud-based infrastructure. 
  • Regulatory Compliance: Flexible platform that adapts to dynamically changing regulatory frameworks and mitigates risks. 
  • Faster Time-to-Market: Swift launch of new credit card products and features for a competitive edge.
  • Data-Driven Insights: Real-time analytics for informed decision-making.
  • Developer Friendly: A platform that is simple to integrate and create newer experiences will give product teams the leeway to experiment more often.  

With its myriad benefits, a modern credit card management system helps issuers stay ahead of the curve in the highly competitive financial landscape. It provides cutting-edge solutions for unprecedented efficiency and customer satisfaction.  

Now, let’s delve into the essential factors that issuers must assess when upgrading their Card Management System (CMS).  

What Factors should Issuers Evaluate when Upgrading to a New Age CMS? 

Before upgrading to a new-age credit card system, issuers should evaluate if the credit card solution provider offers the following features.

End-to-end stack

Juggling between different service providers can be a cumbersome process that leads to inefficiencies, potential data inconsistencies, and increased operational costs. This fragmented approach often creates hurdles in maintaining a smooth and cohesive credit card experience for both issuers and customers. When each vendor operates on separate systems, it can lead to prolonged response time, data loss, and a fragmented customer journey. To streamline processes, increase operational efficiency, and deliver a seamless experience to customers, issuers need to integrate all these crucial functions into a unified system.    

With an end-to-end stack, issuers will no longer need to manage multiple systems or vendors to handle various aspects of credit card management. From customer onboarding to transaction processing to post-transaction support, everything is seamlessly integrated into a single, cohesive platform. This not only simplifies the management process but also enhances operational efficiency, coordination, and communication between diverse internal teams.  Instead of dealing with disparate vendors and interfaces, all stakeholders can access and collaborate on the same platform, streamlining workflows and reducing the risk of miscommunication or data discrepancies.

By leveraging end-to-end solutions, an issuer can launch a credit card program with an impressive speed advantage of up to 5x faster compared to legacy platforms.

Multi-cloud support  

With multi-cloud support, issuers can leverage different cloud environments to distribute workload and applications as needed.  This flexibility enables easy scalability of their credit card management system to meet growing customer needs, all while maintaining high performance and robust security. The approach reduces the risk of vendor lock-in and enhances both reliability and disaster recovery capabilities. By choosing the best-in-class services from various cloud providers, issuers can create customized, cost-effective solutions tailored to their unique needs.  

Cloud-agnostic credit card management systems empower issuers to optimize costs and enhance customer experiences while maintaining the highest levels of security and reliability.  Issuers can future-proof their credit card management systems, ensuring they remain at the forefront of the fintech revolution. 

API-centric architecture  

Even in this day of age, credit card issuance to a new customer takes 2-3 days. In some cases, customers still need to visit the issuer’s location.  

But an API-led credit card system can change this.  

An API-based credit card management system can empower issuers to issue cards to a customer in under 3 minutes. It can enable significant transformation in financial experiences and help customers benefit from real-time money transfers, 24/7 access to bank accounts, instant identity verification, seamless onboarding, and much more. An API-led system places the end consumer at the center of all developments, ensuring the consumer experience is always at the forefront of innovation.  

With an API-centric approach, issuers can seamlessly integrate their credit card management system with internal and external applications. This means easier access to data, faster processing of transactions, and streamlined workflows. In addition, APIs enable real-time updates, offering issuers instant visibility into critical information such as transaction history, pending payments, and available credit limits. They facilitate secure and efficient communication between various systems, enhancing the overall efficiency and responsiveness of the credit card management process. 

Cost-effective ownership  

Implementing and maintaining a credit card management system involves significant expenses, right from initial setup costs to ongoing maintenance and upgrades. A cost-effective ownership model ensures that the investment made in the system delivers long-term value and Return on Investment (ROI). By opting for a credit card management system that offers a low Total Cost of Ownership (TCO), issuers will be able to optimize their budget allocation and channel resources toward other strategic initiatives.  

A system with a low TCO not only reduces operational costs but also eliminates the need for large-scale infrastructure investments. It optimizes resource allocation, streamlines processes, and minimizes overall expenditure, ensuring that the credit card management system remains economically viable without compromising on quality or performance. 

Single stack, multi-product architecture 

To keep up with the rapidly evolving consumer preferences, issuers must continuously innovate to provide new and differentiated product experiences. These factors play a vital role in customer acquisition and retention. All product platforms that include credit card management systems, will have to offer a future-proof experience to issuers and help them avoid large-scale revamps to cope with the changing consumer needs. That’s where a single new age credit card stack that allows issuers to offer multiple products plays a critical role.   

Let’s take an instance here. Say a retail secured credit card issuer wants to explore unsecured corporate credit cards, once they have reached reasonably good numbers. They should not end up undertaking heavy customizations in the current credit card stack to support their new launch. They should choose a multi-product card stack to explore a wider variety of product options with minor configuration changes.

M2P’s credit card product can be used for issuance of retail secured & unsecured cards, corporate credit cards, retail & SME BNPL card/cardless credit lines, and line of credit products; all of this with just a change in product configurations.

Quick launch SDKs  

Pre-built tools and codes that reduce development time and allow swift integration of new features and customization are quick-launch Software Development Kits (SDKs). With intuitive SDKs, issuers can stay ahead of competition and market trends to offer innovative credit card products effortlessly.  

Quick launch SDKs ensure security standards and consistent experience, especially when issuers are partnering with fintechs for the issuance of co-brand credit cards. Such SDKs can also be made to host sensitive data, without having to expose them over APIs to partners. 

How to Choose the Right Credit Card Solution Provider for your Business? 

To enhance your credit card offerings, choosing the best credit card solution provider is critical. With numerous options available, it’s essential to consider the factors above to make an informed choice that aligns with your goals and customer needs. 

M2P’s Credit Card Management System is India’s only complete credit card stack offering fast, scalable, and customizable credit card capabilities. In addition to the core Credit Card processing engine, the solution comes pre-integrated with a Loan Management System (LMS), Fraud and Risk Management (FRM), Loyalty, UPI, Reconciliation, Access Control Server (ACS), and Notifications modules, from which issuers can pick and choose. The fully integrated package is a powerful tool for issuers to build organic or inorganic credit card businesses, at an economical cost of ownership. The platform encompasses program management, card operations, reconciliation, dispute management, as well as accounting and operations.

Why M2P? 

  • Launch Products 4X Faster  
  • Balance Portfolio Management 
  • Lower Total Cost of Ownership (TCO)
  • Enable Seamless User Experience
  • Leverage Cutting-edge API Stack
  • Deliver Innovation & Compliance 

We offer a comprehensive array of features, solutions, and functionalities that streamline effortless management, issuance, and expansion of customized credit card programs, perfectly aligned with your business needs. 

Want to know more about deploying a New Age Credit Card Solution? Talk to M2P Fintech Today! 

*Credit Card in circulation

**Credit Card Adoption in India

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