We are often being asked what a Programme Manager is, and the difference between using one or integrating directly with a processor and BIN sponsor. Here is our short answer.
To deliver an e-money solution, whether a card programme or something else, you will need to successfully bring together 3 streams of work: (1) a technology infrastructure, (2) an operational process and (3) regulatory framework.
When considering a BIN sponsor, it is likely that you are launching to deliver a card programme, hence we’ll focus on that piece.
From an operations and compliance point of view, you will need:
An authorisation from a Card Scheme (we work with Mastercard) to issue cards, and therefore the ability to issue card numbers within a BIN.
Depending on your needs, you it might be better to get your own ICA, your own BIN or to share an existing BIN. You could get that yourself by becoming an issuing member of a Scheme, provided you have the right regulatory framework.
If you can’t become a direct issuing member, you can use the services of a BIN sponsor, or Issuer.
An Issuer / BIN Sponsor: If you’re not becoming a direct issuing member of a Card Scheme, an issuer will allow you to get the BIN described above, and therefore to issue cards within your own BIN.
A way to hold the e-money, aka an e-money licence. The issuer will likely provide this for you as well.
A team to help and guide you through operational and compliance matters. The issuer will help in some parts, but a large portion remains on you and you will have to invest in recruiting and training people, and to make sure you always stay up to date on the latest regulatory changes.
From a technology point of view:
You will need a way of processing card transactions, i.e., to integrate with a processor. The processor will work closely with the issuer to ensure configurations are correct and activity is reported appropriately.
You will need an e-wallet system, making sure balances are calculated correctly (it is a lot more difficult than it sounds as the card transactions often come with their quirks).
You will need a back-end system to be able to operate your fleet of cards and support your customers.
You will likely need a front-end system to provide to your users.
A processor will also cover the e-wallet elements if you want them to, but they are unlikely to provide you with a suitable back-office system or front-end.
Other providers you might have to select, engage with, and manage are:
A card bureau / card manufacturer
An agency banking partner
An acquirer (to load your customer’s e-wallet using debit or credit cards)
A FX partner
An international payment provider
A compliance advisory firm
On the other hand, you could choose to go the easy way and select a programme manager.
A programme manager will take every single element above and combine them together in a neat package for you. They will become your only point of contact, and responsible if anything goes wrong. They will guide you through your operational and compliance journey and, in some instances, take most of those responsibilities for you so that you can focus on what you do best and grow your business.
As with anything pre-packaged, you will lose some flexibility when using a programme manager, rather than integrating with everyone directly. That’s why Lerex has built its system to be extremely flexible so that you lose as little options as feasible.
Going through a programme manager will often be cheaper too, as you will only pay for one integration, rather than multiple, and as the monthly fees tend to also be less expensive.
In summary, if you know exactly what you’re doing, have deep pockets and are not in a hurry to go live with your product, a direct integration is probably best; otherwise, a programme manager route is one to consider seriously.
Whichever route you are thinking of, make sure you choose a provider(s) that understands what you are trying to achieve and is willing to support you. You will need flexibility down the line to overcome hiccups and it is vital that your provider(s) understands it and is willing to work through issues with you. At Lerex, we spent a lot of time choosing our underlying suppliers to make sure they provide the best possible service, which in turns allows us to fully support our customers.