For decades, credit cards have been sold as a tiered product that allows consumers to earn their way to the top product rungs by spending more. That's left issuers unable to change premium cards fast enough to address the rapid consumer shifts that have accompanied the pandemic.
Payment technology firm i2c has partnered with challenger bank Unifimoney and recently added separate partnerships with credit card processors Credit Sesame, Archa and CBTC to accelerate innovation cycles for credit cards and more closely tailor services to consumers' financial management needs.
"Most credit cards are still sold like it is the 1970s and you have to 'earn the right' to be a Gold Card member," said Ben Soppitt, founder and CEO of Unifimoney, which targets affluent millennials by providing financial services through a single app.
San Francisco-based Unifimoney uses the single portal tech of Redwood City, Calif.-based i2c to rapidly upgrade and change messaging for remote deposit, to loyalty programs, and eventually for instant card issuing and credit programs.
"Even before COVID, there was already this change in sentiment around credit cards," Soppitt said, adding the trend should be to move away from using cards for social or affluence signaling. "It's less about earning the right to a metal card and more about having the right card for the consumer," he said.
Digital credit companies like
"Partnerships like this have been coming on for the last couple of years," said McCarthy, who came to i2c after 18 years with Visa. "Credit got pulled back when COVID hit, but it is going to come back and we are starting to see the innovations all move there."
Many small banks and credit unions still on legacy systems lack the capability to accept digital remote deposit, provide a mobile wallet, push funds to a card, turn a card on or off when fraud occurs, issue virtual cards instantly, or instantly change terms and conditions on an existing card.
"These digital services are here today, and often the constraint is the payments processing environment that the institution is sitting on," McCarthy said.
I2c is also adding credit card innovation that allows a user of the i2c platform to "point and click" on an interface to make needed changes to a credit card program. "We have had clients during the pandemic that were using miles for travel-and-entertainment rewards, and when that type of entertainment stopped, they were able to pivot quickly to rewards that were based more on work-at-home categories," McCarthy said.
A click of the computer mouse can keep a credit card program afloat during hard times, or at least give it a chance to change with the times.
"A major change can be made at the speed with which the market is moving, like changing fraud rules, allowing clients to pivot and react," McCarthy said.
With all of the hardships the pandemic has placed on banks, businesses and consumers, it has delivered a lesson about what the future holds: Those who are surviving have turned to digital technology in most facets of their operations.
"You see it in restaurants that have gone to order-ahead, digital menus, and social media for marketing campaigns," said Mark Waring, senior associate with Strawhecker Group.
As a consumer who has numerous restaurants near his home, Waring said he felt he would never need at-home delivery. But after COVID hit, he turned to more digital services and has now found them to be something he will continue to use in the future. The same scenario will work for banks advancing in digital services, he noted.
"It was a great experience, finding the right restaurant, choosing food, tracking delivery, making a payment and providing a tip," Waring said. "The lesson is for those who lean heavily into understanding the digital world, they have done it better than most and will continue to do so in the future."
The single stack or channel in the i2c platform is a key factor, Waring added. "A key development on the tech side over the past few years is the ability to connect through APIs. Rather than a stack of code running all of the legacy services, if they want something new, they can now get it through an API."
I2c operates through a single code base, supporting push-and-pull payment APIs as well as ISO messaging formats that allows the company to serve clients in the U.S., Japan, Australia, Hong Kong, New Zealand, Singapore, Dubai, every market in Europe, Canada and increasingly in Latin America.
"Bringing an innovation platform to the credit space is attracting neo banks because they want to move faster on all services for a better user experience and interface," i2c's McCarthy said. "They want to go global quickly and integrate with us for a digital-first experience that lets them grow quickly."
When it comes to payments rails, i2c views itself as agnostic, looking to integrate and hook its clients into everything from prepaid, debit, credit, commercial installments and faster payments.
"We view these as Lego pieces that we can put together differently, depending on our client's use cases," McCarthy said. "We look at clients across the globe, and they consume different pieces of our platform based on what they are trying to accomplish — and it is all through one code stack."
With those capabilities, i2c has looked closely at
