Checkout.com builds out product suite with issuing solution

The news: Checkout.com added card issuing to its suite of offerings for clients in Europe and the UK, per a press release. The API-based service lets businesses create physical cards and single- or multi-use virtual cards. It’s also designed so that Checkout.com shares interchange fee revenues with its clients.

Why it’s worth watching: API-based card issuing is setting the pace of payments innovation.

• It lets businesses create and customize card programs in a matter of clicks without having to invest a lot of money into tech integrations. This opens the door to a range of payment use cases, like supplier and gig-worker payments, that can help improve efficiency and security.
• As API-based card issuers like Marqeta forge business partnerships and gain a larger presence in the card sector, we expect legacy card issuers to support digital issuance solutions through in-house development, partnerships, and acquisitions.

The opportunity: Adding card issuing to its product suite will help bolster Checkout.com’s revenues.

• It will earn additional income from interchange. Checkout.com will receive a portion of interchange fees from its cards.
• The service will also support upselling. Bundling its core payment processing with card issuing—or any of its other payment services—can help Checkout.com attract more customers.
• Checkout.com will grab a slice of the embedded finance market. The global embedded finance market is expected to reach $183 billion by 2027, growing 182% between 2022 and 2027, per Juniper Research. Checkout.com’s issuing service can help it capture some of that growth.

What’s the catch? The issuing service will put Checkout.com in direct competition with firms like Marqeta and Galileo, which dominate the digital issuance sector. But as a newer player in the space, Checkout.com could offer more competitive pricing to stand out.

Related content: Check out our Evolving Payments Purchasing Chain report to learn how growing digitization is changing the payments ecosystem.

This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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