A payment card is a cornerstone element of many types of personal financial services tools and platforms–and an important source of revenue for the companies behind these products. But despite the core role cards play for such offerings, how to actually launch and manage a card program remains a bit of a mystery for many fintechs and entrepreneurs.
At Galileo, we want to dispel that uncertainty–which is why we’ve teamed up with Tearsheet Studios to put together our Card Launching 101 Guide, your one-stop shop to learn everything you’ll need to get a payment card program up and running.
The guide will walk you through all aspects of launching and managing a card, from understanding key partners and their roles, to designing a plan for long-term program success. It also features actionable insights on creating a differentiated card product that customers love, with robust functionality that helps create better experiences, enhances usage and drives meaningful revenue for your top line.
So whether you’re a newer market entrant launching your first card product, or an incumbent who wants to brush up on the latest market developments, you’ll find plenty of valuable information in our deep-dive exploration of card programs.
As a companion to the guide, Galileo and Tearsheet have launched a new mini-series featuring interviews with some of top brands in financial services and fintech, including challenger banks, established financial institutions and technology partners,
In each episode, we’ll delve into these providers’ own experiences launching, scaling and supporting card products, gleaning valuable insights you can apply to your own business to help ensure you’re optimizing this critical component of your offering.
Check out the episodes below:
In our first episode, we explore planning a new payment card product, highlighting the key steps in the process of ideating, creating and launching a card. Case studies from Wise, Bluevine and Dave provide real-life examples of all that goes into a card launch and offer unique perspectives on the strategic rationale and approach to the process.
In the second installment, we focus on the importance of finding the right partners for your card program–a vital aspect of achieving long-term success–and give you the tools you need to ensure you get this crucial choice right. We’ll detail the key considerations you need to factor in, ranging from cultural fit, to product breadth to cost, to determine which partner or partners can best support your program’s needs and business goals.
In the final episode of our three-part series, we tackle what you need to do after your card is launched, detailing the key support steps you must take to promote and grow your nascent program. From choosing a rollout format, to designing a marketing campaign to incorporating customer feedback, these efforts are key to ensuring a new card product’s long-term success, so we’ve rounded up some expert advice to help guide your strategy.
Episode 1 Transcript
Launching a card is such a core part of today's financial services whether you're an incumbent or a fintech, a card is likely or will likely be a cornerstone product in your portfolio and an important contributor to your revenue. What baffles me is that with all the new technology platforms, banking-as-a-service and experienced program managers there's still a gap for for firms and entrepreneurs to really understand what goes into launching and managing a card. I'm Tearsheet's Zack Miller and in collaboration with Galileo we wanted to shine some major light on the card launching process making it easier smoother and if things go right more successful and to do that we enlisted some of the best fintech and financial services firms out there to talk about what they've learned launching and scaling card products. We turned to some of the top brands like Wise and Dave with millions of cards in their users' hands. We also talked to the platforms and banks firms like Cross River Bank and First National Bank of Omaha, and we talked to Galileo, the technology and processing platform powering the cards of many of today's most popular fintechs. This podcast miniseries is intended to help get your card launch right. One thing you'll hear as we speak to some of the best in the industry is they need to plan well. It doesn't mean you'll get it right the first time around but at least you'll have a way forward. We want you to know what's ahead for you and ultimately to learn from some of the best and brightest around who've launched cards ultimately used by millions of people and companies, learn from their battle scars and successes. This is the first of a three-part series. To dive even deeper I encourage you to download the guide we published incorporating all this inside information and more. To download your free guide go to tearsheet.co slash card guide. Without further ado let's jump into the subject.
Why launch a card?
We're kicking off this series with a discussion of the important thinking and planning of successful card programs. If you're thinking about launching a card, the first question you have to answer is why. Why do you want to launch a card? The answer will impact many of the actions that follow. I asked Sharon Kean, Global Products and International Expansion at WISE, about the why behind launching a card. Sharon, what's the first thing a company or entrepreneur should think about when it comes to envisioning a new card?
There are a lot of cards out there, especially in the US. I've never seen so many cards, and I think the average person here has too many, in my opinion. So does the world need another one, and why? Usually, if the answer is specific, then it's going to be good. If it's general, it usually means someone's just sniffing around for revenue, and I'd be a bit skeptical of that. Try and push on, like, what specific problem do you want to solve, especially when you're first launching because you can't build a great general card product, right? Yeah, there are a ton of undifferentiated cards out there.
To that end, companies tend to fall into two categories: ones where their card is a key strategic and functional differentiator in their product set. These types of companies put more time, effort, and money into getting their cards right. The other types of companies tend to see the card as an add-on, an extension to the revenue streams. Neither approach is right or wrong, or better or worse; it's just a starting point.
International money transfer firm WISE falls into that first camp, where the card is a functional extension of the firm's value proposition. Sharon Keane plays a big role in the international money transfer company's card program. Sharon, tell us about the WISE card and why it matters. It's a debit card, and it's a debit card in every market, and that was quite intentional. What we saw was people asking us, 'Hey, I want to spend the money that's in my account,' and then they had another very specific problem, which was we saw that they were very international and wanted to spend it in different currencies. The really cool thing about the WISE card is whatever country you spend your money in, we convert based on the best conversion of currency. So you could be holding euros and spending in the US or India, and we'll pick the best way to do that conversion. Many of our customers have multiple balances, so there's some logic there around, well, do you convert from GBP or Euro or USD? And we take that decision away and just really make it work seamlessly for the customer.
That's interesting. So the WISE debit card extends WISE's core value proposition. Contrastingly, BlueVine, an SMB banking platform, falls into the second category, where the card just makes sense and is expected by its customers to round out the functionality of their accounts. I asked CEO Eyal Lifshitz about the role his firm's card plays in its total offering. The heart of this platform is a checking account. When we think about checking accounts, of course, a component of that is a debit card. For us, when we set out to add that product within our offering, of course, a debit card was included in the feature set of the checking account. But that was the mindset. I do think that there are some companies that set out to launch a debit card. For us, checking is broader; we have many features within the checking account, but of course, our customers expect that debit card will come without offering.
Dave, a popular bank-like app, has its roots in providing its users overdraft protection; the debit card just followed. CEO Jason Wilk was responding to customer demand when he launched a card. "Well, if you look at our founding, we started off by being an overdraft protection solution for any checking account in the country. As opposed to taking your Chase or Wells Fargo negative and getting charged a $38 fee, you would download Dave, connect to your Chase account, and we would then look at your transactions to alert you about upcoming bills that could overdraft you. We'd spot you 75 bucks interest-free, as opposed to charging you a crazy fee like your bank. That garnered us a lot of goodwill and a strong brand with our members, and it was no surprise that our number one most requested feature was for Dave to launch our own checking account as well. We felt it was very important for the long-term strategy of the business."
Have a vision.
"So Dave's launch of a debit card came directly from consumer demand, huh? The role your cards play may change over time; you may offer new cards, retire old ones. That's okay. But once you've figured out your why, all kinds of planning can commence. You'll hear over and over how important it is to have a vision for your card program in the beginning, and that's admittedly really hard, especially if you're new to launching cards where the learning curve is steeper.
The better planned you are in the beginning, the more likely your card will be successful. Here's fintech Bank Cross River's Anthony Peculic, Head of Cards, emphasizing the importance of having a vision: 'You say, hey, I'm going to start with a debit card, but I'm going to add a credit card in the future, right? Because it makes sense, or I want to add some sort of loan product or insurance. These are things you have to start thinking through and then being like, is my ecosystem that I'm looking to build up, what will I need to do to add to it? And if I do need to add, understand that that's going to be potentially another 9 to 12 months kind of exercise.'
So, things take a long time here, as you probably know, and to me, it's more just thinking and envisioning. Envisioning just generally, 'Hey, of the products that are here now, of the five or six or seven or eight, whatever that my folks support, how many of those would I may want to do regardless?' And again, it could just be a high-level concept. I just want to think ahead because, you know, I could cut that 9 to 12 months down to maybe 4 to 6 months, which is significant in terms of revenue."
Debit and Credit.
"That's a good point, Anthony. It's probably a good time to explore the differences between debit and credit and the work that goes into them. First National Bank of Omaha powers 250 financial institutions co-brand reward and affinity partner-branded in-market card programs. That work has culminated in Bend, a credit card as a service platform. The firm recently launched Mark Butterfield, the firm's SVP of innovation and disruption, spearheaded the move into productizing his firm's work with cards.
'I think of a couple of different things. I think what a lot of fintechs have done that have consumer-facing products already, think of launching a card as a debit card product, and then they've done a lot of variance and a lot of exciting, innovative things with a debit card. But if you want to launch a credit card product, the main thing to think about is they're not the same. Just know that they're not even the same animal. There's nuance to credit cards; now you're in the lending business. So it's almost like thinking of deposits and lending aren't the same thing. Even though there have been debit card variants out there that look like credit products, it's still not lending. Once you get into the credit card, you are now entering into somebody's lending something. So you've got to think about who takes on the risk of that, who balance sheets to securitize those loans. It's a whole host of things from a compliance perspective and from a management perspective that you're opening up a whole new pandora's box when you want to get into that.
Got it. Debit and credit are two different animals; credit is its own undertaking and opens up a different type of opportunity to service customers. If you go this route, there are new things to consider. Some considerations, for example, one is what is the credit quality that you're targeting. That is a big question that exists in a credit card but does not exist in a debit card, meaning are you targeting Prime, subprime, near-Prime? That is a one question. The second question is, what is the use of the card? Do you want this to be somebody who is a spender or transactor, or are you launching a credit card more as a lending product or is it an occasional revolver? What do you mean by that? That question also brings about, are you launching a true credit card or are you launching a charge card or more of a corporate card? That is also an important question.
Ayal, that sounds like a bigger decision set. For a lot of tech firms, this kind of planning is totally in line with their focus on deeply understanding and servicing their customers. Greenlight, for example, serves the general banking needs of families with kids. 'I think it is really crucial, but probably very natural for a lot of these fintechs and how they are so customer-led. They know who their customer is; they've probably gotten feedback from their customers directly that they want, 'Hey, when are you going to offer a credit card?' So it's very natural for them that the work really needs to get into, 'Well, how are you crafting the loyalty piece? What makes them loyal to you? Is it a currency you have? Is it a rewards point system, or is it something else entirely?' For example, when we launched with our platform with Greenlight, they were really clear in all this. They had done a lot of planning and due diligence; we're talking six plus months of planning and work before they even came and talked to us. They were really clear on the value proposition of why they wanted to do it, what they wanted to do, and how they wanted to create a loyalty program with a credit card."
Test, test, test.
"There's a tendency in some cases to want to get a card product quickly to market. Maybe it comes from the entrepreneurial spirit, maybe it's market-driven, maybe investors want it. The main thing, though, is to not cut corners with testing. Philip Cormier plays a pivotal role in business development for Galileo, which, as a platform, offers card issuing, payments, checking, savings deposits, and lending via APIs. He and his team generally are the first touchpoint an entrepreneur or firm has when they connect with Galileo. Galileo has played an important role in many of today's top fintech cards. Philip's seen a lot of winners, and when it comes to planning, he cautions against taking shortcuts.
It can be enterprises as well that want to enter the payment space. There's an anxiousness about getting to market very, very quickly, and shortcuts start to creep in. To me, the biggest pitfall is rushing it. Test, test, test. We have, you know, the road is littered with broken-down cars that did not test, they did not give themselves enough time. And you've heard this; I say this a lot, probably too much, but there's an old advertising adage that the fastest way to kill a bad product is with good advertising. So you rush to market, you've got the fabulous app, you've got all these great marketing techniques, and the product doesn't work right. It has bugs, customer service isn't good, you have too many declines, and it dies quickly. You really get very few chances to make an impression, so that's the number one, being too anxious to get to market quickly and not taking their time, making sure it's done right, and test, test, test."
"I guess when you zoom out a bit, Phillip, the difference between a successful card launch could be boiled down to an issue of value. Sure, there's a marketing lift needed; companies need to execute well on communicating. But it's about value. Does your product fulfill a need and deliver value to users? Is it different from the sea of sameness out there? The amazing thing about Wise is it's not the kind of company where you have to go into a room and brainstorm your vision. It's really built on the vision, and that mission originally was built out of a frustration that banks would charge hidden fees for people to move money between countries. Many of the people who I work with at Wise have experienced this personally, myself included. I moved over to Hong Kong, sent some money back to the UK, and then realized that the amount I got in the UK wasn't what I expected. I'd checked the exchange rate and was expecting a certain amount, and then saw that a decent amount had been taken off. When you see that happen and you understand it, you have this real fire to want to change it. So, that's why we don't need to do mission brainstorms; we know what we're here for. Everything we build in our product is about solving that problem. It's about making it easier, cheaper, more transparent, and faster to move money around the world. Understood."
"For some companies, clarifying a vision for the card follows easily if there's a vision for the business and how it serves customers. If that's clear, it can flow through to the card product. So when we launched this, there's a lot of thought that went into, 'Okay, what are we going to do differently, and how are we going to differentiate, and what's sort of the approach here?' The key areas that we started out with are, first of all, invest in really making onboarding very easy and simple.
If you look at the market for consumers, you have more and more options to open accounts online. For small business, not as much; it's more complex. There's a lot that goes into that. The onboarding is more complex, but there's more compliance and risk management. That is an area that we heavily invested in to create a very strong digital experience of online onboarding, which very much hit the was, you know, on point in terms of trends. It was the beginning of the pandemic; you couldn't go to the branch, and many of the traditional financial institutions didn't offer online onboarding for small business. So that was part of the card offering – how do we create a very seamless online digital experience for opening an account and getting the features and services that you need?
The second part was we crafted the offering in a way that would appeal to our target segment. Part of that was offering a very friendly account experience that offered a lot of the services that small businesses need. We really wanted to create a full-service experience, a full offering, a rich one, not just a narrow-based debit card. Even though we launched with the debit card first, we realized that we're really going to go and invest and build true banking. As part of that, we very much looked to create a lot of value for our customers in an account that didn't offer any fees and didn't come with all the nickel and diming that the traditional checking account comes with for small businesses. But then, in addition, offering yield on the account, which was unheard of for small businesses. Creating a lot of attraction and benefits for the product, and we did see a lot of interest even when we started."
"I see. So if you get this right, and not all firms do. The impact of introducing a card to your customers can have an impact across the business, but to get there, it really ties back to the discussion around overall vision and value proposition. Stash is an investing app that helps people get started on the long road of saving and building wealth. The firm's stock back card is pretty cool; it enables users to earn fractional shares of stock in the companies where they spend money. So, if I'm buying a latte at Starbucks, instead of receiving points or some cash, I'm actually passively building a portfolio in the companies I choose to do business with. Liza Lansman is CEO for the firm. Stock back is a debit card that allows consumers to earn stock when they shop for their everyday expenses. The idea for it came from our founder, Brandon. A lot of folks inside the business have been thinking about what is a way for us to actually connect everyday spending with investing and had gone through a lot of ideation on different kinds of rewards. Then, I think it was one of those things like all great ideas, it was obvious in hindsight. When they hit on this idea, they jammed for a weekend, put out an MVP, had a test of the waters with a small group of customers, and said, 'Hey, if you're interested in this, sign up, put money in the account, and we'll send you this card to spend against.' It sort of took off like wildfire; the reception was amazing. So, the team then said, 'Alright, we've got something here. Now let's actually take all the feedback we got from this small group of beta users and build something over a slightly longer period of time than a weekend.' We actually just got the patent for it a couple of months ago. We didn't want to have a product in our ecosystem that wasn't directly tied to the mission of the business, which is helping everyday Americans invest for their long-term future. This card is really intended to be like a companion piece that reinforces that value and benefit. One of the great things we observe is that for our consumers who use the card, at least 33% of them go on then to make incremental investments above that. So, it is actually serving that purpose of helping as sort of an onramp to get people in the habit of consistently investing over time."
That's a really powerful example. You don't have to get it correct right out of the gate either. It could take time, tweaks, more conversations with customers before a card really takes. The iterative process helps to hone the card's value proposition. By iterating, it's not only the digital experience, but it's the actual value prop. It's the loyalty program that you're using. How are you creating that loyalty? How are you sustaining loyalty? How are they redeeming the points? Where can they spend it at? There are all these elements that go into a successful program, and very rarely do you get it right on the very first try. So, it is iterating, and then it's iterating both the type of credit product you're offering but also the value prop that you're delivering.
I think the type of wallet comes by having a feature that really differentiates you at the front door. There's not a lot of differentiation in debit checking account services themselves. It's all about the surrounding features. As far as having a debit account that attracts people, I think it's table stakes at this point to have no overdraft fees, have no minimum balance fees, which Dave was one of the first ones to bring to market. But it's really what else do you have around it and how do you bring customers in."
"So cards are really about understanding your customer's needs and fulfilling them. Once you have your value proposition straight, or at least have a strong hunch, the planning process requires modeling up the program. You'll need to come up with a distribution plan that takes into account how fast or slow you plan to scale your card. How many users will you have at time x? Choosing the right partners—like a bank and a processor—will help you answer some of these questions.
Yeah, and that's the expertise that we can bring. So, we just want to know things like engagement in their store or in their digital experience. How many daily active users do you have? How do you think about delivering this in terms of an offer, and via traditional or digital means? Then we use our experience to say, okay, this is kind of the take rate you'll get, this is the market penetration you think you'll get. And, of course, like any sales group, you kind of put it at a place that might be a little more than what's expected. But it depends on the partner. We have ones that 10x what we think, and we have ones that are a tenth of what we think, so it's all over the place. But what we can bring is that experience. We can bring the decades of experience of launching these partnership programs and say, okay, we think it'll perform kind of like this, but it could be way better, it could be way worse. So, we usually provide three different scenarios—like a low, medium, high—and deliver that.
Yeah, in the formative stage, modeling a card program sounds like it's as much art as it is science. I mentioned partners. Launching a card requires partners. There's no way around it. You will need partners—deep partners. You'll be working with these firms for years. So, like a marriage, it's important to find the right ones. And like a relationship, knowing what you want and what you need will make for better pairing. We'll explore more about choosing the right partners in our next episode in this three-part series. I'm Zach Miller, Tearsheet's editor-in-chief. This episode is available wherever you get your podcasts. But if you want a full transcription, that's available on our website. Go to tearsheet.co to get it, and there's an accompanying guide, 'Card Launching 101: How to Launch a Successful Card.' You can get your copy for free at tearsheet.co slash card guide"
Episode 2 Transcript
Launching a card is such a core part of today's financial services. Whether you're an incumbent or fintech, a card is likely a cornerstone product in your portfolio and an important contributor to your revenue. Today or tomorrow, as the space has matured, firms have gotten better at partnering, and that's good because you'll need partners to launch a card. As fintech has grown, its financial services have matured overall. The art and science of partnering are definitely improving with time and experience. That's also good because choosing the right partners and figuring out how to best leverage both parties' unique skills and talents is really a big part of the secret sauce here.
I'm Tearsheet's Zach Miller. We wanted to shine some major light on the card launching process, making it easier, smoother, and hopefully more successful. This series is sponsored by Galileo, and participation in this series has some great executives and companies involved. It doesn't mean an endorsement of Tearsheet or our sponsor.
To do all this, we enlisted some of the best fintech and financial services firms out there to talk about what they've learned launching and scaling card products. We turned to some of the top brands like Wise and Dave, with millions of cards in their users' hands. We also turned to platforms and banks, firms like Cross River Bank and First National Bank of Omaha, and we turned to Galileo, the technology and processing platform powering many of today's most popular fintechs. This is the second in the three-part series where we focus on the importance of finding the right partners for your card program.
To dive even deeper, I encourage you to download the guide we published incorporating all this inside information and more. To download your free guide, go to tearsheet.co/cardguide. Without further ado, let's jump in.
You can't launch a card program alone. Even with the best tech and talent, you'll need various partners to launch a card, and that includes a bank and a processor. Who you choose is very important. It's hard to switch when you outgrow a partner or if you realize that a partner actually wasn't a good fit. So it's important to do your homework now and do your diligence upfront to identify a partner you'll work with alongside for the long term. It's almost like a marriage. Some of these deals are 3 to 5 years long. Sometimes you want to vet your partner for cultural fit, product breadth, and cost.
Here's Anthony Peculic, Head of Cards at fintech bank Cross River: "A lot of times, folks want to come in and say, 'I want to do a debit card-focused on debit card. You know what? I found this great bank. I found this great solution. So, debit-focused, great. Boom, boom.' They realize in a year, 'Oh, you know what? I want to offer credit solutions.' Not really the best solutions I have now. Now I have to go seek potentially a second bank, second processor. That's not very efficient, and especially if you're not at scale, you're really going to be impacted cost-wise. Not to mention just relationship management, managing all the moving parts. So definitely, that's the first thing I tell people: think broadly. Think about what you may need in three to five years because it does take shifting."
The second thing is, I truly believe you need to find partners that have, as I mentioned earlier, some experience. You know, not to say, "Look, credit cards, debit cards, you do them, they're somewhat similar. A lot of it becomes use case. It's not really different products; it's use case-related. But I do think you have to have a bank that's willing to work with you, understands your use case upfront, and is willing to support it. You don't want to be surprised a few months in where you're vetting the concept, and all of a sudden, there are problems. So really make sure you take time to vet upfront and know that whoever is going to work with you can do what you need both from a technical perspective, compliance perspective, and so forth. That could fit within the parameters of the program. Got it. Getting all the moving parts in order isn't a small feat when it comes to planning and launching a card. All the planning in the world can't reverse the effects of launching with the wrong partners.
Jason Wilk, CEO of Dave, a bank-like service that provides overdraft protection to millions of customers, explains what could go wrong, driving home the importance of launching with the right partners: "The planning saves was important. I honestly though wish we did a little more diligence on the space because the first partner we went to work with ended up not working out. And so, it was a lot of work for us to sort of rip out the pipes, and it delayed our launch by at least a year to go with a partner that could get us to scale. So that was somewhat unfortunate."
It's not an easy road to launching a debit program, and it does take a significant amount of employees to get it live if you want to capture most of the economics, which you'll need for having a thriving business at scale. No changing partners midway through is tough. As the space for cards has matured, vendors have too. They've gone from offering point solutions to offering more inclusive product suites. And as they've matured, they've also built their ecosystems of partners they've integrated with and worked with before.
Getting a partner that has participated in a few rodeos is important because they have the experience to keep you on the straight and narrow and guide your work with other partners. So you're going to want to choose your partners right. Some firms start with choosing a bank partner first; others identify the right processor who typically has strong relationships.
Galileo's Susan Chaffin, Senior Director of Technical Solution Design, believes that the success of a card program rests with getting the right partners involved: "It's the most crucial item, I believe. So when you select a partner, you're selecting a partner for between three and five years on a minimum contract. So you need to be able to ensure that that partner not only matches from a technical perspective but what you are anticipating from an ongoing support and integration. Just because, you know, we or someone says, 'Yeah, we can do that. We've got that. 30 days, you'll be live.' But it's truly what actually goes into a program. It's not just the processor per se. There are so many key parties: the bank, the emboss and fulfillment vendor, of course, the processor. You know, what kind of other third parties are involved? You know, looking holistically at a solution or an implementation or a program is absolutely key."
So choosing the right partner, you need to make sure that, again, end-to-end, that your partner that you're choosing, that you're putting so much time and energy and money into is correct. That makes sense. There are a bunch of positive externalities when you pick a good partner. One of the best things that can happen is that they can accelerate your speed to market based on the number of integrations and experiences they've had working with other players in the space.
"But you can also use one of Galileo's existing Bank Partners, so we have 30 plus banks that we're integrated with. Thirty plus, that's huge, right? I know some processors who may be connected to three or four. I know one that's connected to one. So we listen to your requirements, and you say, "I have this program idea. I want to be able to do cross-border transactions. I have a KYC strategy that I'd like to do X, Y, and Z." Well, we'll be able to introduce you to the partners that we know will support your program. We can make two, three, four introductions and be able to really help convey what your strengths are to those banking partners.
There is absolutely a benefit to partnering with one of our existing banks, and what that is, is speed. So we've already got all of the processes set up with the bank. We've gone through all of the due diligence; we've been approved. It's just getting a BIN and then plugging into our system, and you know, a BIN live as soon as I have the paperwork for the association to go live. Visa, Mastercard, Discover – it's two, three weeks at the most. So it's plug and play. If you come to us, you're using one of our existing bank partners; all of a sudden, you're launching faster.
A new bank integration, depending upon their technical and financial acumen, could take four to six months. Sometimes I've seen a new bank integration take two years, and that bank had four sets of developers just rotating in and out. Yeah, so much depends on the original planning. Talking about launching and growth is exciting, but all successful card programs are built by dotting the i's and crossing the t's.
Getting clear on technical requirements upfront saves some heartache later and clarifies the level of investment that launching a card will call for. Here's Mark Butterfield, whose firm FNBO powers 250 financial institutions, co-brand reward and affinity partner-branded in-market card programs. He's worked closely with firms on some of the technical requirements needed to launch a card.
What we've built is, I'll call it the raw materials. So when we talk to our clients for Bend by FNBO, I just want to ask them how obsessed are you with your customer experience? Do you build that out yourself, or do you outsource that? Our primary target customer is the one that 100% obsesses about their experience, owns that experience, and they have builders that improve that experience every day. So that really avoids a lot of the uncomfortable questions of, well, if you obsess about it, then we're just giving you all the raw materials to be able to do that.
Some clients we talk to actually want more of a legacy flavor, which is, "I just want you to do everything for me. I want you to use your app, use your experience. I don't want to embed anything other than maybe the initial application." And that's great. We have a product for that. Understood, partners can do a lot of the heavy lifting when it comes to launching a card, but they can never replace the role a fintech or brand has with its customers. For that, you'll have to take the lead, and your vendors will follow.
When we're talking to vendors that think they want our modern platform yet they don't really own their own customer experience, that's when it becomes a little bit of an awkward conversation because the engineering talent that you need to be able to do that, the tech that you need to do that, I'm not building that. So who's building it? Because if I'm not doing it, you're not doing it, somebody's got to pay for that. That's right.
While there are lots of cards in the market, no one has ever done your company's card. Every team, every company's card is intimately tied into the culture they've built and the value proposition they've communicated to their customers. Here's Sharon Kean, Global Products and International Expansion at money transfer firm Wise.
So that's the tough bit, right? When you talk to the product teams at Wise, the biggest challenge and what we spend most of our time on is how we're going to build something that's going to work here because often the things we're solving haven't been done before. The building is everything. While partners can do much of the heavy lifting, there's a cost in outsourcing parts of the product. Firms that value tight relationships with their customers and control over their experience have to balance working with partners versus doing some things themselves.
So integrating with card schemes and minimizing the number of external parties that we would be reliant on, that's really our mission with the card program now. How do we own as much of that infrastructure as we can so that we can be in charge of the costs and really minimize those costs and not have to pay unfair fees to suppliers that ultimately we have to pass on to our customers? But it's hard. You'll want to button up the hatches on your planning so you can optimize the number and quality of partners invested in your program. I use the word invested because essentially that's what they're doing, and how they look at it. If you want to work with a processor like Galileo, they want your card to be successful. So they'll generally want to really understand your plans; you'll be joined at the hip. Your success is their success. It's almost like meeting with a potential investor. From our standpoint, we also want to make sure that we're partnering with programs that are going to be successful, that have enough burn or enough capital to be able to launch a program, have a good marketing strategy, and have the right team in place – not just from the development side but operations, compliance, and business. So when we start talking with a prospect, and that's where my team comes into play, the solution architecture team, we ask so many questions. But it's really, I would say, more of a learning exercise for our programs.
Every single program that wants to be on Galileo, or we approach them, we go through a guide that we've built called a client solution guide. So this is prior to any contracts being signed, anything. We take it more as a stance of, "Let's collaborate. Let's help understand. Let's understand your requirements. Let's understand how Galileo fits into that, but also how what your resources are like." So at the very minimum, it's a 17-page questionnaire. And what a client gets out of it is, let's say you're brand new, let's say that you just have a fabulous idea, $10 million, and you want to be the next [insert your favorite fintech]. We go through and we teach you everything that you need to know, or we educate.
So, let's say, Zach, that you have an idea and you want to start a B2C. Well, we're going to ask you, "Who's your bank? Why do I need a bank? Let me tell you why you need a bank. What kind of BIN do you want? A GPR BIN? A DDA BIN? A credit BIN?" Alright, who's your emboss vendor going to be? Who's going to be the system of record? What is an emboss vendor? Why is that necessary? How are you going to load funds onto the card? What is your funds flow in money movement structure? What have you thought about fraud, AML, BSA compliance, and so on?
Galileo and the solution architecture team, we take it from a stance of you may not know anything, but we're not here to be judgmental. I don't know, probably a different word to be better, but it's, let's teach you. Let's bring you up to speed on everything that you need to know.
Thanks, Susan. Our first two episodes in this series describe the tough but productive planning work that goes into building a successful card program. Our next episode takes place after you've done the technical, legal, and planning work, and now you're ready to launch. In our third and final episode of the series, we peek behind the curtain to see what some of the most successful firms in the space have done to market, promote, and grow their card programs.
I'm Zach Miller, Te Sheets editor-in-chief. This episode is available wherever you get your podcasts. But if you want a full transcription, that's available on our website. Go to Tearsheet to get it. And there's an accompanying guide, "Card Launching 101: How to Launch a Successful Card." You can get your copy for free at tearsheet slash cardguide
Episode 3 Transcript
Launching a card is such a core part of today's financial services, whether you're an incumbent or a fintech. A card is likely, or will likely be, a cornerstone product in your portfolio and an important contributor to your revenue. But the work doesn't end with launching a new card; there's a whole world of promotion and growth to move a card from being just another option for a user to moving to the top of her wallet.
We've looked at the planning that goes into differentiating your card, creating something new and useful for your customers. But what happens when you put the card into the market also matters. Execution is key here and can make the difference for a successful uptake of a new card.
I'm Tearsheet's Zack Miller, and we wanted to shine some major light on the card launching process, making it easier, smoother, and hopefully more successful. This series is sponsored by Galileo, and in this series, we will have some great executives and companies involved. It doesn't mean an endorsement of Tearsheet or our sponsor.
As we embark on this journey, we enlisted some of the best fintech and financial services firms out there to talk about what they've learned launching and scaling card products. We turn to some of the top brands like Wise and Dave, with millions of cards in their users' hands. We also turn to platforms and banks like Cross River Bank and First National Bank of Omaha. And, of course, we talked to Galileo, the technology and processing platform powering many of today's most popular fintechs.
This is the third in a three-part series where we focus on launching and promoting cards. To dive even deeper, I encourage you to download the guide we published, incorporating all this inside information and more. To download your free guide, go to tearsheet.co/cardguide. Without further ado, let's jump into the subject.
It's a big question, but what differentiates a successful launch of a card versus one that, let's say, doesn't hit its targets? In his business development career, Galileo's Philip Cormier has seen some big successes. I wanted to see if we could distill it down into real action points.
It's all about creating growth momentum, and there's nothing wrong with starting slowly. Sometimes that means launching a functional product to begin with and growing from there. It boils down to understanding your target audience and creating a product and a promise that resonates with them. Don't try to do too much at once. Your 85% solution now is better than the 100% solution later. Because usually, it takes years before you get the 100% solution. You want something that's pretty close.
I've got some clients that launch and then are disappointed that they've only opened a thousand accounts in their first month. That's what you want. You want a nice gradual introduction to the market. That's how you vet customers, that's how you debug things.
Getting out of the gate and allowing your product to gather feedback can be extremely useful. Stash, a popular investing app, CEO Liza Lansman, points out how customer feedback impacted the size and nature of the merchant network her firm built out.
When we first launched, because we got out the door really quickly, we had a relatively limited number of merchants on the platform. Over time, one of the pieces of feedback we got, which we have really put into action, is dramatically expanding that network. You could always choose ETFs or baskets of ETFs to earn stock, but having a broader network where any of these major places you might shop, you could actually earn equity in, was feedback we got from customers, and we actually brought it into the platform.
Here's Galileo's Cormier again, sharing insights into what differentiates successful card launches. There's so much that goes into launching a card, and it's natural to want to get everything right. Often, it's not about spending more to get it right, but about doing the right things and focusing on them.
I had a client once that was trying to perfect a see-through card, went through months and months of experimentation with the card manufacturer to try and get it right. They just couldn't. I told them, "You guys need to give up on that, pick something else because you are losing time." You can get so passionate about something that you just won't move forward. In reality, your card design, the color of your card, makes very little difference in the long-term use of that. Your initial impression is critical, but it's not about the color or the design; it's about the functionality and the value you provide.
Your question about big splashy versus kind of quiet and slow, we've worked with partners that have spent $15, $20, $25 on the package that comes in the mail, thinking it's all going to go viral. People opening up this package, and it's great for the first impression. But if the product's not good, if it's not priced right, it's a waste. Often, something simple is just as effective and significantly less expensive, giving you more money for marketing and other things.
It makes sense to focus more on the product. A lot of times, it's harder to point to what a card program did right, but there are definitely pitfalls that can save time, money, and heartache along the way. We had a customer that was very anxious to get to market quickly. They had an existing company with existing revenue streams and wanted to add a new revenue stream and be in the market much quicker than we were prepared for them to be.
Knowing that they wouldn't be ready, we argued, "Test, test, test, test, test." They said, "We're perfectly comfortable. If something goes wrong, we own it." I said, "Well, you put that in writing." Because six months after they launched, they had a big problem based on them not testing, and it ended up costing them quite a bit in terms of customer refunds and some other things.
I have an example of a client that took almost four years, went through a year and a half pilot, went through all this evaluation, being a big enterprise and bureaucratic. It took them a year to build it and then launch it. In that time period, the market moved on, and the product they launched day one was already outdated and not competitive. No surprise, they ran that product for about a year and then shut it down. They took too long, and they weren't nimble enough.
I have examples of programs that also wanted to launch very quickly. For everyone who's been in the business long enough, when the new bin is issued, it takes time for that bin to be updated in all the merchant tables. Walmart, for example, does one update a quarter. If you missed it by a day, it's three months before your card is recognized in Walmart. Another reason for test, test, test is to make sure that acceptance of your card is good enough. You don't need to wait three months, but you need it to be good enough. Otherwise, that initial impression consumers will get declined, and it doesn't take very many declines for someone to just throw your product in the trash and start over with someone else. Wait long enough to make sure the product really is working.
There are plenty of examples of good launches to learn from. In speaking with the brands and the platforms, it became increasingly clear that differentiating a card concept, planning it really well, and just executing to the T record are crucial for getting a program off the ground.
Here's Galileo's Cormier again with an interesting case study comparing two similar cards, one that did well and the other less so. Yes, so we have a client of ours who, um, their original product was sort of a savings and investing app. It helped people with micro-savings that would look at your transaction history and suggest how much you should save every day. It might be a dollar, might be $10 to $15, very small increments that would add up over time. Then present you ways to either budget for purchases or how to invest that money. They wanted to add a debit card that allowed people to then get access to their savings and spend it when they're ready to, ultimately, try to become an everyday product.
This is actually kind of interesting because we had two of these exact same concepts. They were competitors, like apples to apples. They both signed with us about two weeks apart. Company A launched almost to the day a year later and hit the ground running, opening thousands of accounts every month and has continued to be very, very successful. Company number two took their time; they didn't launch for almost two years. They haven't put a lot of emphasis behind it, and it is very, very slow. So, you know, these are wonderful case studies for us. Company A was very committed; they had a very good plan, hit all their marks, launched when they wanted to, and executed very well. The other company just didn't.
That's a really interesting comparison. Another great example of how much weight a company should throw behind its marketing campaigns comes from international money transfer firm Wise. Wise didn't aim to go viral through its marketing when it launched its card. There also weren't any super splashy Super Bowl ads. Instead, Wise relies on old-school techniques like word of mouth. Here's Wise's Sharon Kean elaborating on the marketing ethos that put her firm's card into millions of users' hands.
We tend to spend most of our time building the product rather than talking about the product and marketing the product. You know, we're not, you don't see us on the subway, for example, in New York. We're not one of those companies that's splashing money and time on adverts. We do do some advertising, and if you look closely, you'll see that we've just rebranded. So our website now looks a very different color and, in my opinion, looks a lot more fresh and exciting than it did a few weeks ago. So we do invest in that, but not to the degree maybe some companies do.
But our principle when we do is to be really clear on what our messages are and resonate with the customer. So the important things with our debit card that we would want to communicate are some of the stuff I've just said around the fact that you can use it anywhere and it just magically converts the currency for you. It does it without charging your fee and does it at the midmarket rate. So you get the fairest option when you're spending money in a different currency. And those are the things that we talk about, those are the things that appear in our adverts.
And when we go to market, we do the basics. We, of course, tell our customers that we've done this, especially the ones that have been asking us for a feature. We'll email them directly often when we're launching products and say, hey, this is new. If you want to try it early on, please do and give us feedback. And then gradually scale that up. But what we don't tend to do is sort of multi-channel, kind of big TV campaigns around things like that. We much prefer the word-of-mouth approach. No Super Bowl ads, not yet, not yet. That would be fun though, wouldn't it? I would be down for having a go at that, but no. What we really believe is if we build something really good and get it to our customers, they'll use it and they'll be impressed by it. Then they'll tell their friends about it, and that's why, actually, generally across our markets, the majority of our new customers come via that word of mouth, upwards of 60%, which is pretty incredible. Because the bigger card processors look at their clients as investments, there's another important point to be made. Ideas need to be vetted, and the macro environment will definitely color the processor's willingness to onboard a new client. For example, good luck trying to partner with a processor on a crypto-to-fiat card. There's little appetite for that now, even if it's a good idea. Here's Cross River's Anthony Peculic on some trends this firm is seeing.
So, um, we've definitely been seeing, first of all, there's definitely demand, right? I don't think there's a question of lack of demand. We're still seeing a lot of programs, albeit, yes, funding has been declining, but there's still plenty of companies and programs looking to launch cards. What we've seen is actually a shift from requests for more debit or checking kind of solutions to now more credit card solutions. That shift has occurred probably well over a year now ago. We've definitely seen a, you know, it's kind of flipped in terms of the pipeline, right? 80/20 almost. In addition, and what that means is that, you know, we're seeing a lot of demand for commercial, for example, commercial credit cards are a big demand product. Credit builder consumer cards, um, tend to be also, we're seeing a lot of folks, and unfortunately, given our economic situation, you know, there is definitely, unfortunately again, a big need for that here in this country right to help raise people's credit scores and get them back on track. And then we're, you know, we're seeing, we're still seeing some element of, I'm going to use the term, you know, whether it be embedded finance or using rewards or building more custom solutions for brands. You know, not the biggest portion of the pipeline, but definitely we're seeing a lot of, you call it co-brands, you could say what you'd like, but really trying to bring payments right into someone's brand kind of experience.
Yeah, the industry has definitely improved the previous few years of bull market and fintech meant that partners and vendors learned how to operate on shorter timelines to move quickly like the fintechs. So programs that used to take many months and sometimes years are seeing shorter launch times. It's getting easier and faster to launch a card. FNBO has a new credit card as a service program called Bend. Here's Mark Butterfield, SVP of innovation and disruption, on the value of building a live sandbox to build and test new card programs.
What we also are looking at doing, and this is still early in this evolution of this banking as a service platform for credit card, is I want to be able to deliver, I'll call the inverted model, which is a sandbox model, which is a brand might just want to test with a few cards and just try it out and not talk to anybody. And at that, and then at a certain point, it triggers of, okay, now you want to actually offer a program. That is what's really intriguing to me is how can I do that at scale? And I have not answered that question yet. We're still figuring that out with our Bend platform. But I want to be able to allow people to use test accounts, onboard a program in a test environment, put it to a production live environment, but still only have the exposure below. I still want to provide that guardrail, but if they don't want to talk to us and they just want to build it through a Dev portal through APIs, I'm happy to do that. We don't have that product yet, but that's what I want to get to.
For its part, Galileo has positioned itself as a kind of general contractor, identifying potential partners, making introductions, giving advice, and providing direction and experience. Its work with clients begins with securing a partner bank. This means even understanding what could happen as your program scales. Will you need new partners, or can your partner scale with you? The bank's role and who acts as the program manager matters here as well. Galileo's Suzan Chaffin describes a growth maturation curve in terms of the relationship FinTechs and brands will have with their banks and partners.
If you enter into an agreement with the banking as a service provider, it's important to understand how that works and the impact it has on revenue splits too. So, Zach, if you came to us and said, "I have a program or have an idea, and I've got, again, my 10 million or $5 million, whatever it is. I have an idea, and I want to have a program." What it really comes down to, if you want to be your own program manager or if you want Galileo to be your program manager, is who has the relationship with the bank. That's truly what it is. So if you don't want to have a relationship with the bank, Galileo can be your program manager. If you want to have a relationship with the bank so you can work directly with the bank on whatever it is that you'd like to communicate, take Galileo out of the middleman seat. Then you can work directly with the bank. But a lot of people are like, "Oh, but what about BaaS? I need a BaaS provider. I want someone to do everything for me." Well, let's talk about actually what it means to be a program manager because it really is who has the relationship with the bank. Galileo has all these a la carte services that you would say, "Oh, but that's what BaaS is." Well, no, BaaS truly is what is that end-to-end solution. But being a program manager as well, who has the relationship with the bank.
Another key item is with a lot of BaaS players, it's on a shared bin. And so if you have a graduation strategy that you're like, "Well, I just want to get my feet wet. I want to get in the door. I want to be able to make sure. So maybe I'm going to go with a BaaS player." Well, as soon as you decide, well, guess what? I am going to be big enough. I am robust enough. Yes, yes. I want to do this. We're in a shared bin. That means that you're going to have to bring up a brand new bin for this to be your own program. You're your own program manager, and you're reissuing. And who owns those accounts? Depending upon your bank agreement or your processor agreement, it's the bank, usually. It's the program, usually. So really understanding, do I want to be my own program manager or not? Again, it's that relationship and that shared bin. So onboarding with Galileo, even us as a program manager, we are always thinking the big picture as far as, well, in two years when you're going to be ready, when you're going to have the staffing and the, let's say, you're going to bring on your own compliance team, etc. You'll be in a good position to just move your funds flow, money movement, let's say, and then take all of the benefits from a monetary standpoint because that's really what it comes down to. You know, if you're on a BaaS solution, you're giving your processor, you know, a large percentage of your basis points from interchange. If you're your own program manager, you're keeping 100% in most instances of that interchange. So it really is a, you know, pro and con gotcha.
So getting partnerships right is also about how much control you want to retain. We've said during this series that partnerships are super important in the success of launching a new card, and like a marriage, this is intended to be a multi-year deal. When sizing up potential partners, Cross River's Peculic recommends thinking about what can go right. What will this relationship look like years down the road? How will this relationship impact the end-user service cost? And you do have to be, you have to be aware of cost because these are longer-term deals. These aren't one-year deals. Some may do that, right? But in reality, most are three to five years. And so when you sign these deals, your business now, your business two years from now are going to be very different potentially, and it could put you in a situation where you can't sustain your business if you're not really thinking about the whole picture of what it's going to cost to build this. You know, and the last thing I'm going to tell folks again, technically, look, a lot of people have caught up. You know, there's a lot of, you know, most of the platforms these days are modern. Maybe not all the banks like us, but regardless, I think that you need to, that's an important piece. But what you'll find is, for the most part, folks, you'll find a pretty modern, usually tech stack operationally. However, people forget about that. And they forget about what it takes to manage this day-to-day. If you don't manage your fraud right, your fraud losses can sneak up on you. Chargebacks, I mean, you go through the list of all customer support. I mean, if you think about it, just the cost of customer support, if you can't handle situations quickly enough, right? But at the same time, also don't throw people off the phone because you don't want them to have a bad experience. It's a balance. So, so there's things like that, which you a lot of folks don't, they just put things on a spreadsheet, right? And then, you know, in the present in a PowerPoint, sound great, but in reality is just that these things come about, and you have to manage them once you go live.
Yeah, it sounds like there's a lot of different pieces to manage before choosing a bank partner. Deciding on an issuer is super important for the success of a card program, and it's not one size fits all here either. Some issuers are better at certain things than others.
So you can make a great judgment call on is Galileo the right partner for you? Who are the other third parties? What do I need for this holistic program? So it's more of a, even a checklist to make sure that I know what I need or what you need, Zach, to be very successful with your fintech solution. Marketing strategy, being able to present to a bank in the best light. You may not have a banking partner in mind. Well, we listen to what you have to say in this lovely client solution guide, and then say, "Okay, well, well, how about we suggest some introductions to banks because Galileo is connected to 30 plus banks and well, who fits best based on your requirements?" And then we make an introduction, but then we also help prep you with, "This is what a bank wants to hear. This is what a bank needs to understand about your program to again make that best match." And the larger, um, executive and operations team, we say, "Okay, well, how's the client thought about this? Do they have the funds necessary? Do they have the bank, um, you know, agreements necessary to be able to say, 'All right, this is a partner that we know will be successful.'"
I'd say it's actually, you know, um, it's Galileo's investing probably just as much as, uh, as that new program investing. Galileo charges a very, very, very low implementation fee. Let's just call it a skin in the game fee. And so it takes Galileo probably a year and a half or more to be able to see profit from that new program. And so we're very much vested in the success of our programs. And so, again, that's why the solution architecture team really and really understands how many staff members do you have? What is their experience level? You know, when do you want to launch this program? What are your MVP plus goals again? Because matching to the right processor, matching to the right partner is absolutely key. You don't want to get three months in and go, "Oh my God, I have no idea I got myself into this."
As technology has improved, it's gotten technically easier to launch a new card into the market. That's all true. But it hasn't made it easier to launch a successful card. That still requires a lot of planning and navigating partnerships, product decisions, and differentiation value propositions and just flat-out good marketing. We've talked to some of the best in the business in order to learn what made their card successful, to learn how they launch new cards used by millions of people and businesses. A few things resonate beginning with the value of good old planning. Sure, it's hard to know the outcome of launching a new card early in the development process, but good planning and some luck will take you a lot of the way. So will choosing the right partners. If it takes a village to raise a child, it takes an ecosystem to launch a successful card. Good luck on your journey. I'm Zach Miller, TearSheet's Editor-in-Chief. This three-part series on best practices to launch a card is available wherever you get your podcasts. But if you want a full transcription, that's available on our website. Go to tearsheet.co to get it. And there's an accompanying guide, Card Launching 101: How to Launch a Successful Card. You can get your copy for free at tearsheet.co slash card guide.
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