How CCaaS will shape the future of the $4T US Credit Card Market

You may have read in Tech Crunch and across the media last week that Railsbank raised $37m to support its global growth and product expansion. We will use the money to build new products, expand into different markets, and invest in the growth of our platform and customers. And one of our largest growth initiatives is launching our US business and Credit Card as a Service (CCaaS) offering. So I just wanted to share some more detailed insights on what’s next for CCaaS in the context of the global announcement.

First, what is CCaaS?

Railsbank is launching a first of its kind Credit Card-as-a-Service proposition in the US based on its Banking as a Service, Cards as a Service and Credit as a Service APIs. The first customers will be live in early 2021.

CCaaS is a turn-key solution for any fintech or brand to build their own credit card with a fully-embedded experience in their app. There are a huge number of companies with credit cards on their roadmap, but it’s a monumentally complex undertaking. This is why we have prebuilt all the components and offer it “as a service” with one contract and simple pricing. Think of us as the fastest, most efficient path to market, with bank sponsorship, credit line, tech stack, and processing software, all in one place, and with a paint-by-numbers guide to help and guide your product build.

Why CCaaS first in the US?

Credit cards are one of the largest opportunities for fintech disruption. They generate around $4 trillion in annual spend in the US, with more around $1 trillion coming from CoBrand Credit Cards such as the cards from Macy’s or Amazon. It’s also the next product on pretty much every fintech’s roadmap but building a credit card is monumentally complex and expensive. And in its efforts to breath new life into this market, Railsbank is following a well established path. Pick a big opportunity, inside a market with a ton of friction, and make it simple and easy to buy.

How is Railsbank’s CCaaS offering different from traditional CoBrands?

The current CoBrand proposition has a fundamental flaw in its business model; It requires the brands to adopt the bank’s experience. However, today’s brands want to remain in control of the customer journey and have the user experience live in their own app. Getting there is a complex proposition, yet we are now dramatically simplifying the process, offering the brands all the components they need to remain in control of the user experience. Putting it in a historical US context, the seamless payments experience that Stripe brought to apps like Lyft and Instacart, Railsbank is now doing for credit cards.

Why will this succeed?

The backdrop to CCaaS is a repositioning of how banks will operate in the future.

People will still bank with banks, but not in the traditional direct relationship many of us grew up with. Instead, people will bank through their favorite brands and the force that powers the connection between the banks and brands will be Railsbank. A virtuous circle is being established: banks can acquire customers through massive existing user bases of consumer brands, consumer brands can enhance the value they bring to their customers, and the industry at large benefits from user-centric companies bringing fresh eyes to banking.

Great companies identify trends and build products that power those trends. We believe that Railsbank is one such company, and one that has identified how both the provider and the consumer can be best served. CCaaS is just one part of the Railsbank strategy which is helping redefine how people interact with the financial services sector.