Why your embedded finance platform needs physical payment cards to thrive
Banking-as-a-service (BaaS) platforms are leveling the playing field between small fintechs and global financial institutions through greater access to payments and banking services. Forward-thinking non-financial companies are also becoming interested in embedded finance solutions that integrate customized payments offerings — such as cards — into their ecosystems to capture and retain customers, drive revenue, and give them an edge in hyper-competitive industries. Key among those BaaS offerings are physical payment cards.
The physical touchpoint: connecting with customers in a digital world
While BaaS solutions connect people to their money through digital methods, hidden in that equation is the payment card itself. To initiate the first touchpoint between the customer and the digital channel, the credentials from a physical card are needed to power a seamless payment experience.
Beyond enabling payments, physical cards can also be leveraged as branded marketing tools that subtly remind the customer who is behind each transaction. Creating a physical connection between a tangible payment card and a digital customer experience is particularly valuable to drive brand value that aligns with larger business goals. Here’s how:
- Despite the popularity of digital payments, digital has limits. Digital payment channels have opened up new opportunities for businesses to reach more customers, but they don’t eliminate the need for a physical card. For instance, digital still faces technology roadblocks when point-of-sale systems go down or aren’t digitally enabled. Payment cards complement digital payments by providing a trusted, widely accepted payment option whenever, however, and wherever customers need to transact.
- Digital payments predominantly rely on cards. While e-commerce has exploded in recent years and the adoption of mobile payments has accelerated, physical payment cards are the backbone of the majority of transactions. For instance, most people who use a digital wallet, retailer app, or other digital payment tool have to load a physical card to leverage those channels. Online and mobile shopping relies on the balanced relationship between physical cards and digital payment enablement. The two sides work in tandem, and no matter how advanced digital payments become, consumers are still dependent on physical cards.
Card-based payments still dominate in volume, even as digital becomes a larger portion of the overall payments ecosystem. Businesses employing BaaS technologies have an opportunity to leverage the best of both worlds and differentiate product offerings via cards that power in-store and online experiences — while also leaning on them to achieve business objectives without sacrificing the speedy product delivery customers expect.
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Cards delivered, fast.
In a digital age when people expect their financial providers to deliver products and services quickly, physical card programs remain nimble and quick to launch. For instance, a card partner that employs just-in-time card production and distribution can get a physical card in a customer’s hands soon after opening the account.
And it’s not just enough to put cards in peoples’ hands quickly; many companies may not realize that physical cards enable continuous marketing opportunities — presenting more chances to encourage customer retention, prevent customer attrition, and drive customer engagement. Tangible cards can act as billboards in peoples’ wallets and can be personalized down to the card material, pictures, and logos on the card. Each time people use them they are reminded of the brand that issued the card — creating positive brand reinforcement that builds loyalty.
If you’re a fintech, FI, retailer, or other business looking to leverage BaaS technologies, lean on a partner that can provide you with digital and physical product options. You never know when your customers will need (or prefer) to rely on your branded payment card as their go-to payment choice. Make sure you’re delivering every customer a blended experience that helps enable their payment choices when and where transactions are happening.
Your business strategy and priorities are unique, and so is your journey with embedded finance. BaaS provider Treasury Prime is here to support you — whether you’re just exploring, or you’re ready to dive in. Developers can experiment with Treasury Prime’s API in our Sandbox, and our sales team is always available for your questions. Contact us.