Aligning Card Issuer Incentives With Customers
Deb Bardhan, Chief Business Officer at Highnote, on incentive structures in card issuing
This pricing model is a bet that card issuing vendors win more by acting like a growth partner than a software toll collector. If the provider only gets paid when card spend happens, it is pushed to help the customer launch faster, tune the program economics, and keep more of the interchange as volume grows. That matters because many fintechs eventually try to cut out middleware when fixed fees and take rates start hurting their margins.
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In card issuing, the money comes from interchange, the fee paid by the merchant and split across the network, bank, program manager, and fintech. In one common stack, the fintech can keep roughly 0.28% on consumer transactions and more on B2B, so pricing terms directly shape whether issuing feels like a profit center or a tax on growth.
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The contrast is with two older playbooks. Legacy processors often charge many separate line items, while some newer platforms add SaaS and implementation fees on top of revenue share. Highnote is positioning against both, while Marqeta is framed as having one processor model and one more managed model with a lower customer share of interchange.
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This is also a retention strategy. Highnote argues that when customers scale, they often try to bring program management, bank relationships, or ledgering in house if the platform is taking too much. A revenue share that becomes more favorable with scale is meant to remove that incentive and keep the provider embedded as the program gets larger and more complex.
The market is moving toward bundled financial software, where cards are one piece of a broader product and customers expect better economics as volume rises. Providers that can pair flexible infrastructure with a pricing model that leaves customers more upside should be better positioned to keep mature programs on platform instead of being replaced once those programs become important enough to optimize.