Spencer Allen
Payments Infrastructure · United States

Cards-as-a-Service
vs. Standard Credit Card

US Market · 2025

Two card products. One gives a bank total control. The other hands it to the builder.

What each model is
Traditional

Standard Credit Card

A bank's product, issued to a consumer. The bank owns every layer - the credit, the card, the data, and the economics.

Chase Amex Citi Capital One
vs
Infrastructure

Cards-as-a-Service

Infrastructure a builder embeds. The CaaS provider supplies licensed rails. The builder controls the product, brand, and data layer.

Marqeta Lithic Stripe Issuing Unit
How a transaction flows
Standard Card - Bank Controls Every Step
Consumer Applies
Hard credit pull. Bank underwrites risk.
7–14 days
Bank Issues Card
Bank's BIN. Bank's network. Bank's brand.
Bank owns
Auth Routes to Bank Processor
TSYS / FIS / Fiserv. No builder visibility.
Opaque
Interchange → Bank
1.5–2.5% stays with the issuing bank.
Bank keeps it
Bank Earns Interest on Balances
20–29% APR if consumer carries balance.
Bank earns
CaaS - Builder Controls Every Step
Builder Integrates via API
No bank charter needed. BIN sponsorship handled by CaaS partner bank.
Hours to connect
Card Issued Programmatically
Virtual or physical. Builder's brand on card.
Seconds via API
Auth Webhook → Builder Logic
Builder approves/declines in real time. Spend policy, fraud, budget enforced here.
Builder controls
Interchange Split to Builder
40–60% of interchange negotiated back as revenue share.
Builder earns
Full Transaction Data → Builder
No data moat for the bank. Builder uses it for loyalty, underwriting, upsell.
Builder owns
7–14 days
Standard card
issuance time
Seconds
CaaS virtual card
issuance via API
~2%
Interchange the bank
keeps on every swipe
40–60%
Interchange a CaaS builder
can negotiate back
8 dimensions that decide the right model
Dimension
Standard Card
Cards-as-a-Service
Issuance Speed
7–14 days (mail + underwriting)
Seconds (virtual) · 1–3 days (physical)
Spend Controls
None - consumer spends freely
Programmable MCC locks, velocity limits, per-card rules
Interchange Revenue
100% stays with the bank
40–60% revenue share to builder
Transaction Data
Bank owns granular data
Full data stream to builder via webhook
Card Brand
Bank brand dominant
Builder's brand on the card
Rewards Design
Bank decides structure and value
Builder designs fully custom rewards
Regulatory Burden
Bank holds all compliance risk
Shared: bank holds charter; builder owns KYC/AML
Credit / Funding Model
Bank underwrites; APR 20–29%
Builder configures: charge, debit, prepaid, or BNPL
Who owns each layer of the stack
Standard Card - Bank Owns Everything
Bank owns
Consumer has no control
Bank Charter & BIN Sponsorship
Issuing Bank
Credit Underwriting
Bank (hard pull, APR)
Core Processor (TSYS / FIS / Fiserv)
Bank-contracted
Card Issuance & Network (Visa / MC)
Bank
Transaction Data
Bank - full ownership
Interchange Revenue
Bank - 100%
Rewards Design
Bank decides - consumer has no say
Spend Controls
None - zero programmatic control
CaaS - Builder Controls the Product Layer
Sponsor bank / CaaS provider
Builder owns
BIN Sponsorship & Charter
Sponsor Bank (Bancorp / Sutton / Celtic)
Core Processor & Ledger
CaaS Provider (Marqeta / Lithic / Stripe)
Card UX, Brand & Design
Builder - full control
Spend Controls & Auth Webhook Logic
Builder - fully programmable
Transaction Data Stream
Builder - no bank data moat
Interchange Revenue Share
Builder - negotiated split
Rewards Program Design
Builder - custom structure, custom value
Credit / Funding Model
Builder configures: debit / charge / BNPL
Who builds each
Standard Card - Who Issues It
Mass-Market Banks
Chase, Citi, Bank of America
Co-Brand Programs
Delta Amex, Hilton Honors, Amazon Chase
Credit Unions
Member-facing card programs
Revolving Credit Users
Consumers who carry a balance month-to-month
CaaS - Who Builds On It
Expense Platforms
Brex, Ramp, Divvy - real-time policy enforcement
Vertical SaaS
Trucking, construction, healthcare spend embedded in software
Gig & Marketplace
Instant worker payout to branded card vs. ACH delay
Hotels & Travel
Virtual cards for OTA reconciliation, supplier payments, guest wallets

If you're evaluating whether to build a credit program via CaaS or a standard bank partnership, I'd welcome the conversation.

Get in touch
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For informational purposes only. Not financial or legal advice. Interchange rates and revenue share terms vary by program, volume, and negotiation. Regulatory obligations depend on program structure and jurisdiction. May 2025