Embedded Software Transforming Card Issuing
Ross Fubini, Managing Partner at XYZ Capital, on the biggest opportunities in fintech today
The real pressure on incumbent card issuers is no longer price, it is product speed and product depth. Modern issuers let fintechs turn a card swipe into software, with instant alerts, merchant controls, receipt matching, tax logic, and other workflows inside the app. Once challengers teach users to expect those moments, large incumbents have to modernize or risk becoming invisible plumbing behind a worse experience.
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Older processors helped companies issue cards. Newer platforms are selling lower level APIs, ledgering, and program management so customers can build approval flows, merchant rules, and other logic directly around each transaction, not just issue plastic faster.
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Ramp shows what that competitive bar looks like in practice. The card is tied to software that auto matches receipts, suggests accounting mappings, and lets finance teams create narrow spend controls for specific merchants, hours, or budgets. That is much harder for legacy stacks built around batch processes.
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The buying motion is also shifting upmarket. Marqeta proved large scale card issuing could support companies like Cash App and Klarna, but newer entrants like Highnote and Lithic are pushing on flexibility, embedded ledgering, and direct workflow control. That is why even big institutions are reassessing long standing processor relationships.
The next phase is a rebuild of card issuing around embedded software, not just payment rails. Winners will be the platforms that let banks, fintechs, and vertical software companies ship differentiated card experiences quickly, then expand from issuing into the broader money movement stack around approvals, payouts, lending, and accounting.