Credit Card Issuance by Small Issuers: Strategies, Risks, and Options

Community banks, credit unions, and banks of all sizes face an imperative of having a presence in payment cards. With almost 600 million credit cards in the United States and 230 million adults using them, these cards are the standard access vehicle for household lending. Smaller financial institutions also face a decidedly uphill fight in the marketplace, which is dominated by the credit offerings of the biggest banks. For some of these smaller institutions, various options, including agent banks that take on the bulk of the credit program, exist to help level the field. 

This Javelin Strategy & Research report takes a wide-angle look at the composition of the credit card market in terms of institution size, assets, and deposits. It also drills down on the performance gaps and looks at the agent bank model, which can help smaller banks and credit unions field credit programs and offerings for their customers.

Key questions discussed in this report: 

• Does every bank and credit union issue credit cards? 
• What options exist for credit card issuers? 
• Do large banks perform better than small banks and credit unions? 
• Why should all financial institutions play a role in credit cards? 
• What is an agent bank program, and how does it vary from a card-as-a-service program?

Companies Mentioned: 

American Express, Bank of America, Barclaycard, Capital One, Chase, Citi, CorServ, Discover, FIS, Fiserv, Independent Community Bankers Association, ServisFirst, TCM Bank, TIB Bank, Walton State Bank, Wells Fargo