Program Management 101

Thanks to contributors Andrew Lambert, Ignacio Javierre and Rob Keenan.

-

Take a look at the credit and debit cards in your wallet at this very moment. What do you see? A plastic or metal card with the name of the card, perhaps a brand name, the name of a bank, and a logo from one of the card networks. We’re programmed to believe that every swipe we make at the store or online is made possible because of the banks who deliver the card to our mailbox or the networks and brands that are ubiquitous.  

While banks, networks and brands are the key players required to bring card solutions to life, they’re often not always the ones responsible for the day-to-day maintenance of card programs.  

Another entity, program managers, plays a pivotal role in the success of card programs within the US, overseeing the comprehensive process of launching and maintaining payment cards. Program managers provide a wide range of services for credit, debit and prepaid programs for FIs, fintechs, vertical SaaS companies, and retailers. A card program's success largely depends on its program manager's competence and scope.  

The role of program management is multifaceted, demanding a synthesis of strategic vision, technical acumen, stakeholder management expertise, and operational oversight, particularly navigating critical KYC, compliance, and risk management functions. These offerings are essential for delivering successful card programs that not only meet business objectives but also adhere to stringent regulatory standards. This whitepaper unpacks the value chain behind program management, the key players and functions required, and the strategic considerations for in-house vs outsourced programs.  

The Value Chain: A Closer Look  

As an integral component of the financial services industry, effective program management processes ensure the smooth operation of credit, debit, and prepaid card programs. These processes shape experiences across various touchpoints, from banks to businesses, and ultimately to both business and consumer cardholders.  

To fully appreciate the short and long-term impacts of a program manager, it is essential to examine the elements that make program managers indispensable. This analysis will provide insight into the building blocks of an ideal program management operation and highlight the versatile nature of this crucial role in the financial services sector.

As seen above, the value chain of end-to-end card program management involves multiple interconnected activities that are required for various stages, ultimately delivering a secure payment experience to the cardholder.  

As mentioned above, stakeholder management expertise is a driver for program management success. The activities listed above are connected by an entire ecosystem of stakeholders and are kept operational through the program manager’s leadership.  

Players in the Card Issuing Ecosystem

Key contributors of card program success  

• Issuers: Financial institutions (FIs), such as banks and credit unions, are the only institutions allowed to issue cards in the US. From a regulatory stance, FIs are the sole owners of direct relationships with card networks like Mastercard and Visa and as a result are an indispensable participant in the card issuing value chain.  
• Card networks: Entities like Visa, MasterCard, American Express, and Discover facilitate global card acceptance by providing transaction processing infrastructure. These companies ensure interoperability between card issuers and merchant acquirers and establish security and compliance standards, mandatory for any scale of operations.  
• Processors: These companies are responsible for maintaining the connection to card networks on behalf of many issuers. They provide services such as transaction authorization, clearing, and settlement, ensuring secure and efficient fund transfers between cardholder and merchant accounts. Processors often also manage virtual and physical card creation through integrations with personalization and fulfillment service providers and may offer value-added services such as fraud detection or portfolio performance reporting.
• Personalization and fulfillment service providers: Specialized entities handle card personalization and fulfillment. They can help build custom experiences for each card which is uniquely tailored to the cardholder's information. Ancillary services can include PIN mailer production and card activation support. These providers ensure all information is encrypted and delivered securely.  
• Technology providers: Suppliers of hardware and software are necessary for cardholder services including, but not limited to, email or SMS alerts, IVR support, encryption, and security services such as 3DS or dual-factor authentication.  
• Merchants: Merchants collaborate with acquirers, payment facilitators, gateways, ISOs, and payment processors to accept cards in exchange for goods and services and optimize customer experiences.  

Important considerations for program managers

Program managers must simplify the complexity by considering how to manage a multitude of services.  

• Design and production: Involves determining card features, branding, and security elements, followed by manufacturing physical cards with integrated technologies (i.e. EMV chips and contactless payment capabilities).  
• Personalization: The process of encoding cardholder information onto the card, including name, card number, and expiration date, along with embedding security features like CVX codes.  
• Distribution and activation: Secure distribution of personalized cards to cardholders, followed by an activation process typically conducted via phone, ATM, or online portal.  
• Monitoring and oversight: Continuous monitoring of card usage to detect potentially fraudulent activities and ensure regulatory compliance, coupled with customer support for issue resolution and dispute management.  
• Servicing and issue management: Ongoing support of the customer experience through channels such as mobile or web apps, call center or automated alerts, also an efficient process to manage cardholder complaints and disputes.
• Deactivation, renewal, and replacement: Management of card lifecycle, including notifying cardholders of upcoming expirations and facilitating card renewals as necessary, and replacing lost, stolen, or damaged cards.

A complete view of end-to-end card solutions

A program manager’s view

Challenges for non-financial and non-tech native companies

As seen above, end-to-end card solutions present significant complexities for companies not familiar with the financial sector. These organizations often face a steep learning curve when navigating the intricate regulatory landscape, stringent compliance requirements, and sophisticated technological infrastructure inherent in card program management. The multidimensional nature of these requirements demands expertise across various domains, including KYC/AML, payment processing, data security, fraud prevention, and customer service, which may fall outside the core competencies of many non-financial businesses.  

Additionally, integrating card solutions with existing systems and processes is challenging, requiring substantial investment in both time and resources. Companies must also contend with the dynamic nature of the payments industry, staying abreast of evolving technologies, changing consumer preferences, emerging security threats, and ever-changing card network specifications and mandates.  

These challenges often necessitate partnerships with specialized service providers or significant internal capability development, underscoring the barriers non-financial and even non-tech native companies face in implementing and maintaining robust end-to-end card solutions.  

The perks and pitfalls of internal vs outsourced program management for efficient card solution management  

The program management lifecycle begins with strategic planning and feasibility assessment. This crucial phase involves defining program objectives, analyzing market demands, and evaluating regulatory requirements. Program managers are tasked with coordinating various stakeholders across the value chain, including financial institutions, technology partners, and regulatory bodies, to design robust program structures, lead pertinent decision making across the value chain, and secure necessary approvals.

In-house program management offers benefits such as: control over strategy, personalized customer experiences, quicker decision-making, and better alignment with organizational goals. It allows for direct oversight of operations, fostering deeper integration with existing systems and processes.  

There are, however, some noteworthy challenges to consider. These include a higher initial setup cost to hire specialized expertise in regulatory compliance and technology, and potential resource constraints for scaling operations. The added organizational strain may distract the fintech or brand launching a new card program from focusing on their core customer value proposition.  

The question becomes: is there a way to limit the downsides of building program management capabilities in-house or to build partnerships that provide an experience of in-house without bearing the burdens?  

Conclusion

Card program management and the value chain of card issuing are complex yet vital processes that underpin the modern financial ecosystem. Effective management ensures that cardholders receive a secure, reliable, and convenient payment method, while the value chain adds incremental value at each stage, from card design to transaction processing to cardholder servicing. By understanding and optimizing these processes, financial institutions, fintechs, and brands can enhance customer satisfaction, reduce fraud, and improve operational efficiency, ultimately driving business growth and profitability. Deeper ties and connectivity within the value chain required for end-to-end card solutions create more equitable access to the spectrum of financial services to more consumers across use cases.