Unveiling the intricate layers of credit card issuance and procurement: persisting challenges confronting fintech companies
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Navigating the launch of a card issuing or acquiring business may look like a simple technical feat at first sight. Design a sleek app, partner with a payment processor, and your journey is underway, right? Not quite. Fintechs soon discover that beneath the surface lies a multilayered landscape of regulatory hurdles, operational demands, and infrastructure decisions that can easily derail even the most promising startups.
In an era where users expect speedy transactions, flawless digital experiences, and unwavering reliability, meeting these expectations is more about expertise and robust infrastructure rather than just enthusiasm.
"Launching in payments isn't just about great ideas," remarks Nikita Melnikovs, Board Member at DECTA. "It's about execution within a very complex environment. We've seen ambitious fintechs falter, not due to a subpar product, but because they underestimated what it takes to get off the ground."
Obstacles Often Overlooked
Before processing a single transaction, a fintech must secure regulatory approvals, typically an Electronic Money Institution (EMI) or Payment Institution (PI) license, and clear Visa or Mastercard onboarding. Even with licensing secured, there's the choice between partnering with external processors or building a card system in-house, plus the need for compliant 3D Secure setup, IBAN account issuance, fraud prevention tools, and transaction monitoring. The scope quickly surpasses initial expectations.
Starting a business in acquiring also presents obstacles: onboarding merchants, ensuring real-time settlement capabilities, developing smart routing engines, and integrating local payment methods. Every region, every market, brings its unique challenges - both technical and regulatory, which must be meticulously tackled.
Regulations are in a constant state of flux, making compliance a costly burden for young companies. From PSD2 to evolving AML directives, staying ahead of the curve requires a dedicated legal and compliance function.
It's Not About Tech, It's About Experience
Technical readiness is one piece of the puzzle. Many fintechs have capable development teams yet lack the experience to navigate the nuanced requirements of launching and scaling a payments business. This is where many stumble.
The difference between success and stagnation often lies in the ability to make the right infrastructure decisions early, to avoid regulatory pitfalls, and to launch with a model that is both compliant and scalable. Such decisions can't be made based on a quick Google search - they need trusted partners who've been there before.
Why This Matters More Than Ever
With intensifying competition in the payments space and investor pressure to scale quickly and efficiently, fintechs can't afford to tread the path of trial and error. Every delay in certification, failed integration, or misstep in compliance translates to missed market opportunities.
The most successful fintechs aren't just the ones with the best user interface - they're the ones that got their infrastructure right from the start.
Paving a Smoother Path Forward
Having supported the launch of hundreds of acquiring and issuing businesses across Europe, APAC, MENA, and LATAM, DECTA has witnessed these challenges play out again and again. That's why they've developed the Fintech Fast Track - not as a product offering, but as a support framework for ambitious fintechs seeking to scale smartly.
The program not only offers reduced access to DECTA's payment processing platform but also hands-on guidance, strategic industry connections, and up to €100,000 in launch savings. It's designed to remove friction in the earliest growth stages, allowing fintechs to focus on innovation and customer experience rather than regulatory paperwork or backend complexities.
Learn More and Apply at www.decta.com/fintechfasttrack
Additional Insights:
- Regulatory and Compliance Challenges: Fintechs must overcome license requirements (EMI, PI), scheme certifications, and anti-fraud and AML compliance to proceed.
- Operational and Strategic Decisions: Fintechs must decide between third-party vs. in-house processing, ensure real-time settlement capabilities and smart routing, and prioritize scalability and funding.
- Market and Ecosystem Complexities: Navigating consumer expectations, competition, global expansion, and regulatory complexities are integral to success in card issuing and acquiring.
- Integration and Customer Experience: Efficiently onboarding merchants and users, simplifying integration, and providing unified platforms are crucial for a smooth customer experience and operational efficiency.
- Regardless of the sophistication of a fintech's technology, navigating the launch of a card issuing or acquiring business requires expertise in executing within a complex environment with numerous operational demands, infrastructure decisions, and regulatory hurdles.
- In the ecosystem of the payments industry, success often hinges not just on having latest technologies, but on the fintech's ability to make the right strategic decisions, avoid regulatory pitfalls, and launch with a compliant and scalable model that can cater to market complexities, consumer expectations, and competition.
