Recently, I posted a question about CCaaS, and as I’m expecting mostly don’t know about this service, which was an innovation in the field of fintech. Now every country or organization knows the importance of Fintech. Governments are working to develop such programs that increase their progress rate in becoming a cashless society. This current pandemic also increases cashless payments. People now preferred to buy or purchase things without cash because of safety precautions. So, this is correct if I say that the COVID-19 pandemic increases the importance of fintech all over the world. Usage of mobile banking apps and credit cards increases rapidly all over the world. Different brands also initiate such programs or apps which easily operate banking services for their customers because if customers are facing any difficulty in buying any brand products this will decrease their sales. Now, brands are doing contracts with other banking as a services provider to establish their payment apps to make a stronger bond with their customers.
I always appreciate those who take advantage of the current situation or demand and develop programs according to the current situation. Same way, Railsbank the leading US open banking platform took advantage of this current condition and start a new service named “Credit Card As A Service (CCaaS)” for their customers in the US. Railsbank has launched operations and will deliver its entire platform, including Banking as a Service, Cards as a Service, and Credit Card as a Service (CCaaS) to fintech and ‘brand’ customers in the US.
CCaaS is a turn-key option for any fintech or brand to create their credit card with the full experience of their app. There are a large number of credit card providers on their Roadmap, but it’s a monumentally complicated endeavor. Railsbank has pre-built all modules and sold them “as a service” with a single contract and easy pricing. Think of them as the easiest, most effective way to market, with bank sponsorship, credit sheet, tech stack, and processing tools all in one place, and a paint-by-number guide to aid and guide the product growth.
How this CCaaS is beneficial for others or brands ??
Let’s imagine you’re running a business and you’re fed up with banking rules and challenges. How this CCaaS is helpful for brands or other people all over the world. Following are the major points that how this service is beneficial:
1. Every brand can make their own credit cards without having a bank’s experience mean no banking license is required, you just have to contract with a credit card as a service provider for your brand.
2. As you don’t need ownership, so this huge cost of ownership will give you a benefit in making discount offers for your customers.
3. Brands can make their own terms & conditions about their credit cards as this is their own product.
4. The usage of credit cards and the usage of no cash will increase all over the world.
5. Brands can control their customer’s journey and can easily operate their plans related to make stronger bonds with customers.
How this Credit Card is different from others
What steps brands can do to make their own credit card different from other existing banking credit cards in the market. Following are the key point to make this service different from others:
1. In CCaaS you can provide less interest rate as compared to the market because in general bank credit cards if you carry a balance from month-to-month, you’ll pay interest charges, so you can end up paying hundreds or thousands more than you initially charged in interest if you’re unable to make repayments each month.
2. If you tackle credit card fraud better than other banks or cobrands then your credit card will be on top because the customer is fed up with credit card fraud and after fraud, they will face long months process to resolve their frauds. So, you can provide better security and better customer service in resolving fraud issues.
3. You can provide a better discount in using your credit cards at your outlets. This will increase your sales.
4. You can provide fewer annual charges on your credit cards. While you can often get debit cards without annual fees, most credit cards have them. These can cost as little as $25 per year or as much as $1,200 depending on the card that you choose. Generally, the more perks you want, the higher the cost of the annual fee.
5. Businesses often apply a surcharge when you pay with a credit card. For Mastercard and Visa products, this fee is usually 0.5–2% of the total transaction cost, while for Amex cards it could be closer to 3%. You can provide better credit card surcharges than others.
In short, now the game is in your hand if you play it with the correct strategy you will surely on top of the game because there are many competitors in the market. This CCaaS is easy to serve you just have to build your credit card on an easy step process and you also get a user-experience app.
How this CCaaS will impact the World or Banking Industry:
CCaaS is the first-ever credit card as a service strategy that can be easily used by any brands at low cost and easy to operate as per Railsbank statement. Surely this service will affect all over the world especially the banking industry. Following are the main points that how this will affect others:
1. Already competition is very high between brands, every brand came up with a new strategy every day to make them better than others. After CCaaS now there is very tough competition because when brands have their credit card so they can easily manage their customers’ life. In CCaaS, the brand should be proactive in making strategies because if you late in any planning other brands will take advantage and surpass you.
2. The backdrop of CCaaS is a repositioning of how banks will operate in the future because once the bank credit cards become less popular in the market. Banks will surely come up with a new strategy to overcome this service. Banks maybe will try to collaborate with other brands and give them more valuable services better than CCaaS.
3. Banks will try to make stronger bonds with their customers by providing better services. Banks can acquire customers through massive existing user bases of consumer brands, consumer brands can enhance the value they bring to their customers.
Nigel Verdon, co-founder, and CEO of Railsbank, said about this CCaaS:
“The high costs and complexity of launching credit card propositions have stifled innovation by creating barriers to entry to all but the largest of traditional financial companies. Fintech has changed the face of much of the banking industry, but, to date, the credit card market has been immune from this disruption. Railsbank will be able to drive change in the market with its CCaaS offering.”
Unifimoney, the first full-service neobank for high-performance practitioners, has become Railsbank’s first CCaaS client. The Unifimoney credit card will be launched in the fourth quarter of 2020 as an integral component of its unified mobile account, including savings and investment, to help simplify personal financial management.
Ben Soppitt, CEO of Unifimoney, commented:
“We invested a year searching for the right partner: a company that could manage the complexity of credit cards and is a true innovation partner. We are extremely pleased to have found that company in Railsbank.”
Summary
Many innovations are made in making payments easy but if we look there is no change in the processing of credit cards, the process is almost the same since ago.
The reality of becoming a credit card customer remains the same as it was 20 years ago: sketchy new card incentives, fixed monthly payments, nonsensical perks, benefits, and random sales, and generic spending caps regardless of the individual personal circumstances.
As per Railsbank, their credit cards are easy to process as compared to others. If Railsbank will provide easy setup steps or make a stronger bond between brands and customers then after some years the Credit Card Market surely will change. As this service will live from early 2021 so it’s too early to conclude anything but I am expecting new challengers on the same lines in different parts of the world soon.
It is more than trillions of dollars business globally if we can shape it correctly this will increase more and more.
