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How Cards-as-a-Service is reshaping the future of digital payments

By Puja Sharma

January 16, 2025

  • AI
  • CaaS
  • Digital Economy
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Fingerprint Payment Card, Biometric Payment Card, FinTech, Contactless Payments, Biomeyric Smart Card, NFC Technology, Digital Security, Digital Identity, Multi-Factor Authentication, Biometric Authentication, Risk Management, Fraud, FinTech, UK, France, Germany, EuropePaymentology, the global issuer processor, in partnership with audax, a comprehensive digital banking technology solutions provider backed by Standard Chartered, and Mastercard, a global leader in payment technology and network solutions, announced the launch of a new report titled Understanding Cards-as-a-Service (CaaS) and the Power of Strategic Partnerships.” The report highlights the transformative potential of CaaS in enabling banks and FinTechs to become distributors of payment services to industries across the board, unlocking new revenue streams and driving growth in the digital economy.

The global payments ecosystem is undergoing a seismic shift, and at the heart of this evolution lies Cards-as-a-Service (CaaS), a transformative model unlocking immense potential for financial institutions (FIs) and FinTechs. The report sheds light on how CaaS is redefining the landscape of payment services through strategic partnerships and innovative technology.

Merusha Naidu, Global Head of Partnerships at Paymentology, emphasised the strategic importance of this model: “CaaS is not just a new model; it’s a strategic imperative for banks and FinTechs aiming to streamline operations, accelerate time-to-market, and create personalised payment solutions.”

The report offers a comprehensive look at how CaaS enables banks and FinTechs to act as distributors of payment solutions across various industries. By streamlining card issuance, enhancing operational efficiency, and providing cutting-edge tools for customer engagement, CaaS is emerging as a key driver for growth in the digital economy.

The Global Growth Story of CaaS

CaaS is set against the backdrop of a rapidly growing global payment processing market, projected to rise from $55 trillion in 2024 to $79 trillion by 2029, with a CAGR of 7%. Regions such as Asia-Pacific and Latin America are leading this transformation, with the Middle East becoming a hotspot for innovation and opportunity.

The partnership behind the report is a notable convergence of expertise:

  • Paymentology brings scalable card processing capabilities to the table.
  • audax, backed by Standard Chartered, offers end-to-end banking technology solutions.
  • Mastercard leverages its extensive global merchant network to ensure secure and seamless integration.

Together, this trio presents a robust CaaS platform designed to empower FIs to simplify card issuance while driving digital transformation.

The Strategic Advantage of CaaS

The report outlines the myriad benefits of adopting CaaS, positioning it not just as an operational improvement but as a strategic imperative for financial institutions aiming to stay competitive. Key highlights include:

  • Instant Issuance and Flexibility: Traditional card issuance methods are often time-consuming and resource-intensive. CaaS replaces this with cloud-based infrastructure, enabling businesses to launch card programs in days rather than weeks.
  • Time-to-Market: CaaS accelerates the launch of new card programs, providing FIs with a competitive edge in a fast-paced industry.
  • Operational Efficiency: With scalability at its core, CaaS eliminates the overhead associated with legacy systems, allowing institutions to focus on growth.
  • Revenue Opportunities: By adopting CaaS, financial institutions can explore new revenue streams, catering to a wide array of industries with tailored card solutions.
  • Enhanced Customer Experience: CaaS emphasizes personalization and convenience while maintaining high security standards, meeting the demands of digital-first consumers.

Similarly, Mike Breen, Chief Commercial Officer at audax, highlighted how CaaS empowers institutions to meet modern consumer expectations: “CaaS isn’t just about operational efficiency—it’s a strategic pivot that enables banks and FinTechs to unlock new revenue streams, meet the expectations of digital-first consumers, and future-proof their payment capabilities.”

Real-World Impact

The whitepaper also features compelling case studies, showcasing how leading banks, FinTechs, and platforms have successfully implemented CaaS to adapt to shifting market dynamics. Examples highlight the speed and efficiency of CaaS, with businesses seeing a reduction in time-to-revenue by up to 50% compared to traditional methods.

Adding to this perspective, Gaurang Shah, Executive Vice President, Product and Engineering, EEMEA, Mastercard, pointed to the transformative potential of CaaS: “CaaS represents a game-changing approach to card issuance and payment services, allowing financial institutions to meet the growing demand for flexible, digital-first solutions.”

From instant issuance to enhanced scalability, the benefits are clear. By simplifying the complexities of card issuance, CaaS not only drives operational efficiency but also positions FIs as enablers of innovation in payments.

As the payments landscape continues to evolve, the adoption of CaaS signals a strategic shift for financial institutions. By leveraging the expertise of partners like Paymentology, audax, and Mastercard, banks and FinTechs can harness the transformative potential of this model to stay ahead in the digital economy. For an industry at the crossroads of technology and finance, CaaS offers a roadmap to future-proofing operations, unlocking new opportunities, and delivering unparalleled value to customers. This is more than a trend; it’s the future of payments.

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