FTTea with Cokie: Credit Card As A Service, Part Two

Hi y’all, Cokie here. 

Welcome back to part to of our series on "Credit Card As A Service." In part one, I gave an introduction to credit cards, including terminology and history (did you know American Express started as a freight forwarding company in 1850?!). Today, I'm going to dive in to co-branded cards from traditional institutions, and touch on modernized credit-card-as-a-service offerings. Sexy, I know, but stick with me. I promise it's actually super fascinating. 

CCAAS and Co-Brand Players

Traditionally, a brand seeking a co-brand card would approach an issuing bank, seeking them to operate a program with a share of profit coming their way. Many of the major consumer issuers operate co-brands both for travel and retail brands. In addition, there are a number of issuers that have specialized in co-branded and private label cards. In the past year a new wave of fintech companies offering CCAAS have emerged. 

It is important to acknowledge that this ability isn’t new. Banks have been whitelabeling credit cards for the better part of the last half century. Every major airline has a credit card. To do that, American Airlines would go to Citibank and Citibank would offer a white-label card. Citibank would have many customers looking for whitelabeled credit cards and they would fulfill each one of their customers wishes by starting from scratch on each customer and customizing the card to the customers specific need. The key to CCAAS is a repeatable and modular offering. The majority of whitelabeled cards have identical backends, which has been under-utilized in favor of “customer service.” Consider the Stripe approach: one can visit their website right now and get payments up and running with their API. It’s repeatable and standardized. However, if you want to customize, you can do that too for a higher fee. This is how CCAAS will ultimately look. 

Traditional Co-Brand Issuers


Synchrony was spun out of General Electric. GE and GE Money (as it was previously known) were early entrants into private label credit card processing in the second half of the twentieth century. GE Money expanded into co-brand cards with many major retailers such as Walmart (although they have since lost this brand to Capital One).

Synchrony is estimated to run more than 40% of retail co-brand volume and operates dozens of private label cards and co-brands. Recent cobrand entrants from Syncrhony include the Verizone Visa Card and the new Venmo credit card. Synchrony has a very limited direct-to-consumer operation. Brands must have more than one million active customers to be considered a viable partner by Synchrony.

Comenity Bank / Alliance Data Systems

Like Synchrony, Comenity Bank first entered the space processing private label cards through its parent Alliance Data Systems. Comenity offers more than 100 different cards from the American Kennel Club to William Sonoma. While Comenity issues for smaller retailers than Synchrony, require a large consumer base and are tightly integrated with a retail approach.

Approach of Traditional Providers

With traditional providers, whether specialists like Comenity or Synchrony, or larger issuers like Citibank or Chase, the card is a separate experience from the retailer or rewards program. For example, if you have a Citibank American Airlines AAdvantage Card, you will login with one username and password to a Citibank site to manage your card. One per month, your accumulated points will transfer over to your American Airlines account, which you manage separate through American Airlines.

We are starting to see a blurring of some of these lines, with the new Venmo card from Synchrony, which can be managed inside your Venmo app. Additionally, Goldman Sachs, which entered the cobrand space with its Apple Card product provides an integrated approach with Apple. Goldman Sachs will be launching more cards and we will see if this new approach prevails.

See you in Part III where we’ll take a deep dive into credit-card-as-a-service offerings and conclude the report!

Cokie Hasiotis is the founder of Lasagna Tech and resident baddie at Fintech Today. She’s passionate about BaaS for societal good, financial inclusion, and community banking. Previously, Cokie has worked at BCG, 11:FS, and AFME. In her limited spare time, Cokie enjoys competitively reaching her step count, the musical stylings of the early 2000s, and dismantling the patriarchy.