In the first part of our two part conversation with Guy Raymond El Khoury, we looked at where to start, who needs to be involved, reducing complexity, being clear about the purpose, economics and business model of your card offering and finally choosing the right people to partner with.
In the second part of our conversation with Guy, we identify what’s not important, some other considerations, mobile apps and what works with cards & what doesn’t.
Are there things that people often think they need but don’t?
That’s a great question. A good example is you don’t need your own BIN (Bank Identification Number).
A BIN traditionally referred to the first six digits on a card, indicating the issuing financial institution (i.e. the card issuer). In the past, card issuers and payment processors couldn’t reconcile reports across different projects easily, so they assigned each new client and project its own BIN. But BIN ranges started to run out quickly.
To address this, Mastercard and Visa reduced their number usage, and the financial institution identifier has begun to be expanded from six to eight digits.
It’s common for clients to ask for their own BIN because, historically, it was seen as necessary or assumed that it somehow affected or improved the service. Simply put, older systems couldn’t handle multiple products on a single BIN, so each project required its own. This led to increased costs for project owners and extra scheme fees just to track activity on specific projects.
Properly designed modern technology doesn’t require this at all. Today, a sophisticated system can manage multiple products on the same BIN and provide detailed reports with the press of a button, regardless of how the numbers are distributed. In fact, the more random the numbers, the better.
Requesting a dedicated BIN today is a rookie mistake. It’s an outdated practice that adds unnecessary work and costs. Not just at setup but with ongoing fees. Yet, we still see it happen frequently.
Often, clients are told that owning their BIN is a benefit because they could take it to another supplier. However, that’s also misleading. BINs are owned by the scheme and are only assigned to an issuer. They are not guaranteed to be “portable”.
Moreover, the cost of transferring a BIN is often several times higher than setting up a new project with a more modern service provider. When someone asks for their own BIN, it’s usually a sign that they’ve spoken to a provider using outdated technology, who can’t offer a more efficient solution.
What else should you consider?
There is one critical element and it’s a critical ‘don’t’. Don’t go overboard with features. Adding too many increases complexity, and the more complex the product, the harder it is to create and manage. Not only that but it’s also harder for customers to use or, even sometimes, understand its core purpose.
Complexity also drives up costs and makes them harder to predict. It’s like installing digital lighting in your house. Sure, you could have a thousand buttons that each do something amazing or control every bulb individually, but most people just end up using the simple on/off switch. No one changes the mood setting every three minutes. It’s one of those things that sounds cool at first, but in reality, it’s rarely used.
The same holds true for card products. New features may sound exciting, but they often lead to more configuration, more compliance oversight, and more settings. Every new feature increases time to market and delays the day that you can start generating revenues. My recommendation is to add features incrementally. First, understand why you want a feature, then determine whether you really need it.
You want your product to work well for your clients, be profitable for you, and be easy to manage from a development perspective. If you start with a highly complex product, you’ll spend all your time fiddling with knobs and dials . Some of us enjoy technical, fiddly tasks, but ultimately, they end up frustrating cardholders.
What do you recommend with regards to providing a mobile app?
An app is critical for most products today, however, the same rules apply with regards to reducing complexity. Many people make the mistake of thinking they need to build an entire ecosystem around their card product from day one. I recommend keeping it simple. You’ll already have so many elements to juggle that it can quickly become overwhelming.
I’ve seen people plan to build an app with every feature imaginable, completely bespoke, and years later they’re still struggling to make it work. If your service provider has a solid, off-the-shelf interface that works, start with that. Prove your business model, make sure you’re happy, and more importantly that your customers are happy, then phase in additional components over time with the help of a good service provider.
Most people will either build an app or hire someone to do it, and almost every time, it takes much longer than expected.
App development is a huge undertaking if you’ve never done it before. Sure, some businesses genuinely need a completely, ground up, bespoke solution, but for most, using an existing platform, customising it with your branding, and tweaking it for your needs is the better way to go – and it’ll be ready much sooner.
If needed, you can always replace it with something more bespoke later. Use the tools available to you from the start, and keep things as straightforward as possible. I say this as someone who loves having every button and feature on everything, but ultimately I’ve learned it’s best to start simple.
Is there a way of working out what works well and what doesn’t?
That’s a great question, and another ‘do’: Do research other products on the market. Test out similar services to yours. Get a sense of what you like and dislike. Download their apps and experience them as a customer. Check out reviews. See what they do well and where they fall short. Find out which features customers want that are missing. There’s a wealth of customer feedback already available that you can learn from.
Do ask lots of questions, and don’t hesitate to ask for clarification if something isn’t clear. Also, verify what you’re being told. Just like with the BIN (Bank Identification Number) example, there are things you might be told you need that actually aren’t necessary.
Educating yourself is essential. There’s a lot of jargon in the industry, and people will often use terms assuming you understand them. That’s why we’ve created a resource that walks you through the terms, explains their meanings, and why they matter. More news on this will follow in the coming months.
We’ve covered a lot of ground. How would you sum it all up?
I’d say there are three key dos and one critical don’t. Do identify your needs and those of the cardholders, understand your budget, and know how you’re going to make money. Don’t go nuts on features. Not initially anyway. Grow your business first and then tweak your card product.