Focus versus Rebuilding Card Rails
Bo Jiang, co-founder and CEO of Lithic, on the key primitives in card issuing
This is the core moat for modern issuing infrastructure, it saves a customer from turning scarce product and engineering talent into an internal plumbing team. For a large fintech, bringing issuing in house can trim a few basis points of cost, but it also means staffing network connections, transaction parsing, reconciliation, compliance workflows, card manufacturing, and bank coordination that Lithic already built over years. The trade is not vendor margin versus free. It is focus on the product versus rebuilding rails.
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Lithic was built out of Privacy.com, so its pitch is not just software, but already debugged operational know how. That internal card business exposed thousands of edge cases, and the platform has processed billions in payments across millions of cards. That matters because the hard part is not issuing one card, it is handling every strange exception after launch.
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The alternative paths split by customer type. All in one BaaS platforms are the fast off the rack option for teams that want a card live quickly and do not want to manage banks or compliance details. Direct infrastructure ownership is the opposite extreme, where companies like Brex build straight to the network so they can control global rollout and risk in house.
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This is also an org design problem. Lithic argues that if an issuer processor keeps saying yes to every big customer request, it drifts into a services business with customer specific work that starves self serve product investment. The winning balance is to handle the common card primitives centrally, while integrating with specialist partners for KYC, ACH, compliance, and other adjacent functions.
The market is heading toward a clearer split. The biggest platforms will own more of the stack only when scale and global complexity truly demand it, while most fintechs and vertical software companies will keep buying modular issuing infrastructure so their best people can stay on customer facing product. That leaves modern issuer processors competing less on raw price and more on how much roadmap they give back to customers.