Card Issuing as Customer Acquisition

Card issuing turns a cost center into a growth loop. Instead of charging users for a card, account, or spend tool, the software company can give it away, earn interchange each time the card is used, and use the card itself to pull more activity into its product. That is why virtual cards helped Square move Cash App balances into purchases, Klarna extend BNPL beyond integrated merchants, and Ramp make free corporate spend software economically viable.

• The money comes from merchants, not end users. In the BaaS stack, most revenue comes from interchange paid by the merchant when a card is swiped. In the model here, fintechs often keep a larger share than the infrastructure provider, which lets them subsidize a free product on the front end.
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• The card is also a distribution surface. A branded card pushes more transactions, more behavioral data, and more repeat usage back into the app that issued it. For vertical software and digital brands, that means deeper loyalty and a direct window into where customers spend outside the core product.
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• The best comparison is Ramp. Ramp launched a free corporate card with cash back and bundled expense controls and reconciliation into the workflow. That let it replace paid expense software with a product funded by payment volume, then expand from the card into the broader finance back office.
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This model spreads anywhere software already sits in the flow of money. The next wave is vertical SaaS, marketplaces, and brands using cards as the first wedge, then layering on lending, payouts, and accounts once they own the transaction stream and the customer data that come with it.