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With a variety of use cases, virtual cards offer flexibility and control over payments. Instant issuance of virtual cards has now allowed unprecedented speed and convenience to end users – however, for fintechs, these come with their own sets of challenges.
Juggling regulatory compliance, product scalability, card issuance, and more can slow down and overcomplicate processes. Small to medium-scale businesses need flexibility and room to scale in a highly competitive market. In such cases, partnering with banking as a service provider helps reduce the financial burden.
At the same time, working with banking as a provider can speed up the licensing, issuing, and launching process. Allowing crypto and fintech platforms to go live within six weeks.
But before we jump into the solutions, let’s understand how the end users and businesses are navigating the cards ecosystem.
How Instant Issuance Became A New Standard In The Fintech Industry
One thing about FinTech – payments are never fast enough. There’s always demand for speed, convenience, and innovation.
Instead of waiting for weeks to receive a physical debit card, consumers prefer an instant virtual card. And since virtual card controls are much more convenient – such as blocking, freezing, and setting payment limits – businesses too have doubled down, thus increasing user retention.
What’s more, since online purchases have increased, this comes with the added responsibility of ensuring safe and secure transactions. Safety features like dynamic CVV, single-use cards, and spend controls safeguard against fraud or theft. Along with that, customers vouch for the flexibility that comes with virtual cards. Specifically, the option to create a virtual debit card for multiple use cases – meaning a user can now have more than one virtual card tied to their account.
What Makes Instant Issuance Complex
As convenient as virtual cards are, they come with their share of challenges for the fintech and crypto platforms.
For one, balancing instant virtual card issuance with regulatory compliance is complicated. Not only do fintechs need licenses to operate, but also, carrying out regulatory procedures requires a dedicated team capable of handling KYC and AML protocols. And since these protocols are necessary for operations, companies cannot ignore the requirements.
And an absent compliance procedure means customer onboarding becomes complicated as verifying users and completing documentation can slow down the onboarding process considerably. Not only does it lead to frustration amongst end users, but a broken onboarding process can often overlook fraudulent users, thus compromising the security of the platform.
That’s not all. Technical and operational challenges can significantly affect scalability and user retention if constant iterations are not done to improve the product. Working with outdated systems that fail to handle real-time transactions, third-party API integrations, server downtime, or slow response time can lead to increased operational costs.
On top of that, many platforms lack the customization capabilities to create a virtual debit card. Features like multi-currency transfers, spend limits, or self-branding can incur high implementation costs. Not to forget, partnerships with multiple intermediaries is a huge investment – all of which slows down the go-to-market process, making it unnecessarily complicated.
Tried And Tested Solutions And How Fintechs Can Take It Up A Notch
Fintechs now recognize the need to switch to more sophisticated systems designed to handle high transaction volumes and seamless integrations. To meet consumer needs, many partner with card networks to issue physical and virtual cards, and with KYC/AML automation to speed up the onboarding process.
But while these strategies can help with the roadblocks, there is a persistent underlying issue with this – high implementation costs and multiple partnerships.
In such cases, what works better is partnering with a provider that offers all of the above solutions under a single platform. Better known as a crypto banking solution.
Striga’s crypto banking as a service model provides small to medium-scale businesses with the infrastructure required to go live within six weeks. From simplified API integrations that allow instant virtual card issuance to an in-house compliance unit for smoother onboarding and verification – it’s a one-stop shop solution.
Striga Crypto-native Banking as a Service:
Your path to building and launching financial products
Join the financial businesses that use Striga’s cloud platform to delight their customers and launch their own products without the complexities that come when dealing with core banking solutions’ relationships, licensing, compliance and payments methods.
