Incumbents Handle 80–90% Card Volume
Bo Jiang, co-founder and CEO of Lithic, on the key primitives in card issuing
Legacy issuer processors still control the center of card issuing because they already run the giant bank programs where most spend happens. FIS, Fiserv, TSYS, First Data, and similar processors sit behind the debit and credit programs of large banks, so even when newer API first issuers get the attention, the bulk of swipes still ride on old cores that are deeply integrated into bank operations, compliance, and network connections.
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Modern processors won by making launch easier, not by replacing the installed base overnight. Marqeta, Galileo, Stripe, and Lithic cut card launch times from many months and large upfront integration work to API driven rollouts, which unlocked fintechs like Cash App, Klarna, and Ramp.
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The incumbents keep share because scale in issuing is not just software. Large programs need bank relationships, network connectivity, card manufacturing, fraud controls, compliance workflows, and operational support. Those layers make battle tested processors sticky even when their developer experience is worse.
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That is why newer players often start in the long tail. Lithic was positioned as issuer processor 2.0 for developers and smaller embedded finance use cases, while larger enterprises increasingly either stay with established processors or buy broader platforms that bundle issuer processing with compliance and program management.
Going forward, share should keep shifting at the edge first, in vertical SaaS, embedded finance, and specialized B2B programs. But the deepest moat remains inside big bank infrastructure, so the winners will be the companies that either own that regulated plumbing at scale or make it dramatically easier for new programs to launch without rebuilding the whole stack.