Hi y’all, Cokie here.

Welcome back to part to of our series on "Credit Card As A Service." In part one, I gave an introduction to credit cards, including terminology and history (did you know American Express started as a freight forwarding company in 1850?!). In part two, I dove in to co-branded cards from traditional institutions, and touched on modernized credit-card-as-a-service offerings. Today, we look at the fintech providers in this space, the moral aspects of credit cards and debt, and then we tie everything we've learned together.

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Fintech CCAAS Providers

Fintech providers of Cards-As-A-Service provide an API-driven experience enabling partners to define their own experience. Additionally, they may provide options for partners to participate in various parts of the service from lending to customer support more than a traditional provider. Fintech providers are not limited to working with a single bank issuer and may provide more flexibility for a program, although the space is nascent.

Unlike pure play processors, such as FIS, Fiserv, Global Payments (TSYS) or newer Banking as a Service companies like Marqeta and Stripe, CAAS platforms are able to issue consumer credit and include capital and underwriting. Most traditional processors are built to expect the issuer to provide underwriting and capital for lending (in contrast to BAAS debit cards, where there is no lending).


Deserve is a late-stage startup founded in 2013. The company initially set out to build alternative underwriting to provide credit to recent students or immigrants. The company believes that there are alternative signals to identify creditworthiness from those who have limited credit history used for traditional cards.

In 2019, Deserve shifted its focus from its own branded Deserve card to providing a cards as a service offering. Its first two offerings were more traditional co-brands, one with the New Jersey Institute of Technology and one with Sallie Mae. Both the namesake Deserve Card and NJIT cards are issued by Celtic Bank, a Utah-chartered ILC well-known in the fintech space. The Sallie Mae card is issued by Sallie Mae Bank but managed by Deserve on its platform.

In 2020 Deserve launched its first API-driven partnership with startup Vertical Finance. Vertical’s Grand Reserve World Mastercard is a multi-merchant rewards and loyalty card for wine enthusiasts. Celtic is the issuer. Cardholders manage their loyalty account and credit card in a unified web interface operated by Vertical with APIs to connect to Deserve’s underlying processing and servicing platform.

In late 2020 Deserve announced its first Visa product, a credit card for crypto, BlockFi. The new card is not year publicly launched, but will be issued by Evolve Bank & Trust, another well-known fintech bank.


Railsbank is a later stage processing and issuing platform starting in Europe. They announced their intention to launch a credit cards as a service program in the United States. Railsbank is actively working with several startups but little detail is public. The first card is anticipated in 2021.


Cardless is an early stage startup aimed squarely at taking on Synchrony and Comenity. The Cardless team believes that more brands should be able to launch co-branded cards. Their initial card is a Cleveland Cavaliers card, although public details on the issuer and network are not available. It is less clear if Cardless will operate as a CAAS or more like a traditional co-brand issuer. Cardless won’t be competing with Deserve or Railsbank, opting instead for luxury experiences (such as free courtside tickets or tickets to a concert).

The Landscape

With the above information regarding traditional co-branding offerings and the new and improved credit-card-as-a-service offerings, it’s hard to understand where they sit in comparison together. We’ve put together this diagram to help roughly visualize the landscape.

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Moral Aspects of Credit Cards

Given America’s painful relationship with debt, it is well worth us taking a moment to acknowledge the moral obligation of issuers and providers when talking about credit. In 2019, 37% of Americans had credit card debt -- the worst kind of debt. 70% of Americans have at least one credit card, 34% have three or more. With credit scores controlling our entire financial lives and our ability to buy (or even rent homes) or start a business, it’s no wonder that the American relationship with them is complicated.

Is building out further credit functionality for the ecosystem morally right? I’m not sure. Here’s what I know -- very few people are going to get into extreme debt just because their favorite brand has issued a credit card. For most, it will be a smarter way to buy what they were going to buy anyway. And the competition will be steep. If Nike, Footlocker, Reebok, and Adidas all have competing offers, their terms are going to have to be extremely compelling.


Credit-card-as-a-service does not currently have many participants in the space. With 3-5 CCAAS offerings, frankly the field is wide open. Almost every brand in America is up for grabs and this space is wide open.

Traditional players tended to offer white-label service, with all the bells and whistles of customization and, for the most part, rebuilding significant components of the program from stack over and over again. CCAAS offerings will standardize offerings that can be selected in a modular fashion for each brand.

Let us know what you think about this report! Super huge thank you to Matthew Goldman for joining me in this endeavor, he is a genius on all things credit.

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