The card program pitfalls scale-ups learn too late
Growing a card program is one of those high-adrenaline growth plays: you issue your first handful of cards, transactions start flowing, you feel momentum, and you think: “We’ve cracked it.” But what many scale-ups discover (often too late) is that the economics of issuing 100 cards are fundamentally different from issuing 1,000. The trip wires are hidden in transaction tiers, in multi-entity structures, in regional regulatory complexity – and if you haven’t spotted them pre-emptively, your growth engine can quietly turn into a margin drain.
In this article, we’ll walk you through three critical inflection points where card programs typically falter: transaction-volume tiers that trigger re-pricing, multi-entity and multi-region issuance structures, and how program economics morph when you move from ~100 cards to ~1,000 cards issued. If you’re running or designing a card-issuing initiative built for growth and scale, this is your wake-up call.
Transaction volumes: The hidden re-pricing cliff
When you launch a card program, you often operate in a “sweet-spot” range: your card volumes are manageable, your partner (BIN sponsor, processor, scheme) negotiations assume a certain level of throughput, and margins seem predictable. But as you scale, you may cross invisible thresholds where costs shift, often without you realizing.
For example, many platforms embed tiered cost models: once you exceed a certain number of monthly transactions or cross-border usage rises above a specified ratio, the per-transaction fee may increase, the interchange rebate may drop, or risk-based reserve requirements may tighten. These thresholds frequently lie dormant until you hit them. The danger here is that you keep growing, believing your cost model is linear – until one month you notice margin erosion, partner bills that jumped, or conditions that were never disclosed to you up front.
Why does this matter more now than ever? Because card programs and card-transaction volumes are rising significantly. In the euro area alone, the total number of non-cash payments in the second half of 2024 increased by 8.6% to 77.6 billion compared to the second half of 2023, with total value rising by 3.8% to €116.9 trillion. Cards accounted for 57% of that volume, with the number of payment cards in circulation hitting 750 million. On the issuance-platform side, the global card-issuing platform market was estimated at USD 7.35 billion in 2024, projected to reach USD 20.18 billion by 2033 (CAGR ~11.8%). These growth numbers underline the fact that transaction volumes matter – and importantly, that usage per card may rise, thereby shifting your cost base faster than you anticipate.
From a practical standpoint, when you move from 100 issued cards doing 1-2 transactions per month each, to 1,000 cards doing 5+ transactions per card, you may cross into a new cost regime. Acquisition costs per card may change (partner discounts fall away), processing/settlement fees may creep up, fraud and default risk may rise non-linearly, and cross-border or multi-currency usage may introduce new high‐cost elements. If you ignore these volume‐trigger thresholds, you will likely find your “scalable” model flips into “loss‐making” without warning.
Savvy scale-ups therefore build their models to stress-test these thresholds: they ask partners explicitly “What happens when we hit 5K or 10K transactions per month? Are there tiers? Are extra fees triggered?” They monitor decline rates, settlement lag, reserve escalation, cross-border ratios, and they build internal guardrails (for example, alerting when usage per card or cross-border ratio exceeds a defined threshold). The payoff: you avoid being blindsided when the next tier kicks in.
Multi-entity and multi-region structures: Complexity eats margins
At initial launch, many card programs operate from a single legal entity in one jurisdiction. Everything flows through one BIN, one issuer-processor, one pool of cards. But as you scale, particularly if you expand regionally, you often find yourself introducing multiple legal entities, different issuing BINs, local acquirers, local regulatory regimes, currency conversions, and region-specific partner cost structures. This complexity quietly erodes margins and sometimes remains invisible until the invoice arrives.
Each new country or region brings its own cost and risk profile: scheme and processing fee tables may differ; your BIN sponsor may classify the new entity as “higher risk” until volume builds, triggering higher reserves or higher margin for the sponsor; compliance burdens (KYC/AML/data-localization) may spike; back-office accounting, tax, audit, and transfer-pricing overhead may multiply. Many scale-ups only realize the cost impact when the multi-entity web has already formed.
Even though detailed public data for multi-entity issuance cost escalation is limited, industry commentary is clear: traditional card-issuance methods require 12-24 months to launch, large teams, complex integrations, and substantial costs. The implication is that when you replicate the issuing model across geographies, you are essentially creating repeated “launches” rather than simply “scaling” one model. Each region may need new BIN sponsorship, new regulatory adjustment, new processing contract – and each of these costs.
To illustrate, imagine you operate in the UK from a single entity with 5K cards. You then decide to add an EU-entity, followed by a Middle East/Africa entity. Your existing issuance partner might treat the EU entity as “startup risk” and charge a higher cost per card. You may need to sign with a local acquirer, triggering additional currency conversion/spread costs, and you may face higher fraud or chargeback risk in new regions, which requires higher reserves or tighter underwriting. In short, the economics that held in one entity no longer hold across three entities.
The key mitigation: before you expand regionally, map out the full cost impact of each region (scheme, processing, cross-border, entity overhead). Run a pilot per region, track cost per issued card and cost per transaction as you expand. Design your partner architecture to be modular and region-agnostic, rather than each region a new bespoke build. Maintain clarity on the assessment of legal entity overhead, such as audit, tax, transfer pricing, and identify cost leakage early.
From ~100 to ~1K cards: When economics shift
At the 100-card stage, certain cost lines dominate: card-production, onboarding, and setup costs might be high but manageable given the limited base, and fraud/loss rates may be low because card usage is light and tightly controlled. But at scale, the drivers shift dramatically. Processing/settlement costs per transaction and fraud costs become significant. Average transactions per card may increase (which is positive), but usage per card may also expose you to higher decline rates, higher fraud risk, higher chargeback behavior – and these may scale non-linearly. At the same time, the number of partners (BIN sponsors, schemes, card production vendors, compliance services) may increase; back office and audit complexity may rise; your card program becomes less a “startup” and more an “embedded bank” in terms of operations.
To manage this shift, leading scale-ups build stress-tested models. They monitor usage patterns daily: average transactions per card, cross-border ratio, decline/fraud rate, cost per card per month, cost per transaction. They invest early in scalable infrastructure (card-issuing platform, fraud analytics, partner integrations) so that when volume spikes, they are ready, not lost.
Don’t assume linearity
If you are scaling a card-issuing program, understand this: growth isn’t just “more of the same,” and holding the same model might prove ineffective long-term. You are stepping into new cost regimes, new risk profiles, and new partner dynamics. You may trigger silent re-pricing at volume thresholds, multi-entity expansion will add hidden overheads, and your internal economics will shift dramatically.
To avoid being caught flat-footed, focus on three guardrails:
- Watch for volume-trigger thresholds that change your cost base.
- Understand the impact of multi-entity, multi-region expansion on your operations and economics.
- Recognize how your program economics will change when you move to a higher card volume.
If you plan proactively, you turn your card program from a purely growth engine into a future-proof, sustainable profit generator, rather than a growth trap you only realize too late.
Why scale-ups choose Satchel
If you’re moving into the territory of high-volume card issuance, Satchel offers a robust White Label Cards program built for growth, flexibility, and control. Our solution is designed to address many of the issues we’ve covered in this article:
- A fully-operational White Label Card platform, powered by Satchel European Mastercard licence, so you can launch quickly, without building or licensing the full issuing stack yourself.
- Flexible pricing and tariffs, no collateral required, no hard limits on initial card volumes, helping you avoid the surprise cost-escalations that hit scale-ups.
- Support for both physical and virtual cards, tokenization, 3-D Secure, anti-fraud & risk-management measures covering many of the risk and processing-cost dimensions that change at scale.
- A streamlined setup process that lets you launch a fully operational card program in just 15 business days, so you can validate and iterate fast rather than be locked into a slow build.
- Coverage for SMEs, startups, retail, and logistics customers, supporting flexibility across business models and geographies.
In short, if you’re scaling your card program and want to stay ahead of the re-pricing cliffs, multi-entity complexity, and shifting economics, Satchel is built for that path. Reach out to our team to get started.
