Intermediaries Create Card Issuing Bottleneck
Deb Bardhan, Chief Business Officer at Highnote, on incentive structures in card issuing
The real bottleneck in card issuing is often not code, but how many parties sit between a customer problem and the system of record. In a layered BaaS stack, the app, program manager, processor, sponsor bank, and ledger can each hold only part of the answer, so a declined swipe, missing refund, or settlement mismatch gets handed from team to team. That slows support, makes month end close more manual, and gets more painful as volume grows.
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A modern card program has multiple moving pieces. One source breaks the flow into fintech, processor or program manager, sponsor bank, and network, each taking part of interchange. That same layering also means each party owns only one slice of transaction data and operations.
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The hardest operational jobs are disputes, authorizations, settlement, and ledger reconciliation. Highnote argues most providers either lack a full ledger or only track settled card events, which leaves finance teams matching incomplete records by hand when money in the bank does not line up with card activity.
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This is why larger customers start treating middle layers as cost and complexity to remove. As volume scales, more interchange shifts to the fintech, while banks and middleware are compressed, so customers have stronger incentive to own more of the stack if vendors cannot deliver clean data and fast issue resolution.
The market is moving toward fewer black box intermediaries and more infrastructure that combines processing, ledgering, and program operations in one place. The winning platforms will be the ones that let a support or finance team trace a transaction from authorization to settlement in one system, because that is what makes card programs manageable at enterprise scale.