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Industry insights

Why do non-bank lenders offer credit cards?

Ondřej Machač
min read

In recent years, lenders have been exploring different ways to offer loans to their clients more quickly. Ideally in a few clicks. One solution that's gaining traction is the use of credit cards – be it the physical plastic card or its virtual counterpart. This article will take a closer look at the reasons why non-bank lenders are resorting to using these cards as part of their offers.

Riding the digital wave

Potential customers are increasingly seeking to obtain a credit card. Why? There are several reasons, in addition to the current trend towards digital and fast financing, which payment cards reflect. Clients also appreciate the additional benefits that cards bring with them. These include detailed transaction records that allow them to track spending and revenue, and the ability to get discounts from various merchants and partners. These are primarily cashback or shopping benefits. 

In essence, payment cards are more than just digital finance; they enhance the overall financial experience by offering convenience and other benefits. But let's delve into the specifics.

Rapid provision of funds 

Payment cards allow almost instantaneous provision of funds to clients. For example, virtual cards can be activated almost immediately after loan approval, making the process faster and more convenient for the client.

Payment data for analysis

Payment cards offer rich payment data that is a valuable source of information for non-bank providers. Without payment cards, the non-bank provider sends funds to the client's bank account. All payment data is ultimately obtained by the client's bank, not by the lender, which is a pity. 

The card puts the institution in control of the payment data. This enables better tracking of client behavior, which can be used to improve risk models, personalize services and improve client segmentation. Transparent data is also appreciated by clients, as demonstrated by Poland's BNPL player, Twisto.

"Thanks to the accuracy of TapiX data, our customers have better insight into what they have recently paid for. Such transparency translates into greater customer satisfaction and their attachment to our products. It also reduces operational costs related to customer service and chargebacks," says Pavel Prucek.

Flexibility and responsiveness to client needs

Payment cards offer flexibility to institutions to adapt in real-time to shifting financial needs. Be it altering card limits or launching new discount promotions, it empowers institutions to meet today's clients on their terms.

For example, 61% of consumers feel they need more information to make better sustainable purchasing decisions. The Tapix EcoTrack engine can help with this by clearly categorizing data into understandable informative segments.

TapiX Eco Track

Overview of non-bank lenders

There are more than 320 microfinance providers in the European Union, according to the Microfinance in Europe: Survey Report. In such a saturated market, innovation is essential to gain a competitive advantage. One solution may be Virtual Cards and Buy-Now-Pay-Later (BNPL) solutions.

Where to look to improve UX?

The biggest giants of the tech world like Amazon and Facebook lead the global market in a way that affects most industries. They provide amazing experiences for their clients when using their services. Security, trustworthiness, or a pure number of features are no longer the deciding factors in a customer's journey when choosing a financial partner - UX is key

The digital lending market is evolving rapidly. All 320+ non-bank lenders in the European market should adapt and innovate to respond to changing customer needs. The introduction of payment cards, whether virtual or physical, brings a number of benefits to non-banks. These include data on the use of borrowed funds, rapid provision of funds, or increased security. The change is here, and payment cards are at the forefront of this transformation.

About author

Ondřej Machač

Executive officer

Specialist in building (not only) business relationships. A FinTech evangelist who can't even make tea without technology

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