Learning the friendly way

Dear Tap Community,

We want to share an important update regarding the XTP token and Bitfinex. As part of a broader internal review, Bitfinex has decided to delist several tokens, including XTP along with other notable projects like The Graph (GRT), Notcoin (NOT), and seven others as part of their platform review. This appears to be a broader shift in Bitfinex's listing strategy rather than something specific to XTP.

What’s Next for XTP

The good news? XTP remains at the heart of everything we do! 💙 Our token continues to power all the awesome features you love - our tier structure, rewards, and the entire Tap ecosystem. This change doesn't affect our exciting roadmap or our vision for the future.

Here’s what we’re doing to keep things moving forward:

ProBit Integration in Progress:
Our dev team is already working on integrating ProBit (where XTP currently trades) into our Trading Engine. This will create a seamless trading experience right within our platform!

New Exchange Adventures:
We're in exciting talks with several exchanges to give XTP even more trading homes! While we need to keep the details under wraps for now (those NDAs, am I right?), know that we're pushing hard to create more options for our community.

Community First:
Remember to withdraw your tokens from Bitfinex before July 15, 2025, if you haven't already. We're here to help if you need guidance on this!

The Road Ahead 🛣️

Even in challenging markets, we see incredible opportunities for growth! Here's what's cooking:

• More XTP Utility: We're whipping up new ways for XTP to shine in our ecosystem
• Cool New Features: Q2 is going to bring some exciting platform upgrades
• Let's Talk More: We'll be sharing updates more frequently so you're always in the loop

We're so grateful for this amazing community! 🙏 Together, we've weathered challenges before, and we'll come out stronger this time too. The crypto landscape is always evolving, and we're evolving with it.

We’re deeply invested in the future of XTP - and we’re just getting started. 👏

The Tap Team

70% of consumers prefer brands that make loyalty easier - card-linked programs make this process seamless. In today’s fast-moving market, forward-thinking businesses are leveraging co-branded payment cards to boost customer loyalty, increase lifetime value, and, as a bonus, unlock new revenue streams. 

Whether you’re in retail, travel, fintech, or beyond, co-branded cards offer a strategic, low-risk way to deepen customer relationships and expand your brand’s financial ecosystem - without the heavy lift of building payment infrastructure from scratch.

In this guide, we’ll break down what co-branded cards are, why they’re a game-changer for businesses, and how you can implement one to drive growth.

What are co-branded cards?

Co-branded cards are payment cards that merge two brands: your business and the financial institution that issues the card. Unlike traditional credit or debit cards that solely display the bank's branding, co-branded cards prominently showcase your company's identity through logos, colours, and design elements that reinforce brand recognition with every transaction.

These customised financial products can take various forms—debit cards, prepaid cards, or even digital payment solutions—all carrying your brand's distinct identity at the forefront of Tap’s financial infrastructure.

Why co-branded cards drive business growth

The strategic advantages of co-branded cards extend far beyond simple brand visibility:

Enhanced customer loyalty is perhaps the most significant benefit. By offering exclusive rewards, discounts, or perks tied directly to your products or services, co-branded cards incentivise repeat business while creating emotional connections with cardholders.

Revenue diversification comes through interchange fees, where businesses receive a percentage of each transaction made with the card. This creates a passive income stream completely separate from your core offerings.

Valuable customer insights are another bonus that emerges from transaction data (within regulatory compliance), providing unprecedented visibility into spending patterns and preferences. These insights can inform product development, marketing strategies, and shape personalised offers.

How co-branded cards work

Co-branded cards are successful when each entity works in harmony with the others. Below we break down the various elements of the strategic partnership:

Role of the retailer, financial institution, and payment network

Each partner in a co-branded card arrangement brings unique capabilities to the table. The retailer or brand contributes its customer base, loyalty program infrastructure, and distinctive rewards offerings tied to its products or services. 

Meanwhile, the financial institution handles the critical banking functions (underwriting, credit approval, payment processing, and regulatory compliance) leveraging its expertise in financial services management.

Completing this ecosystem, payment networks provide the technical infrastructure that enables worldwide acceptance, transaction security, and fraud protection. 

This three-way collaboration creates a seamless experience where consumers simply see and interact with their favourite brand, while sophisticated financial operations run invisibly in the background.

Open-loop vs closed loop cards

Co-branded cards typically fall into two major categories that determine their versatility and reach:

Open-loop cards function anywhere the payment network (Visa, Mastercard, etc.) is accepted, giving cardholders maximum flexibility to earn rewards regardless of where they shop. This widespread acceptance makes these cards particularly attractive for everyday spending beyond the brand's own ecosystem.

Closed-loop cards, on the other hand, can only be used at specific retailers or within a limited network of businesses. While more restrictive, these cards often deliver enhanced rewards and benefits when used within their designated ecosystem, creating powerful incentives for loyal customers to concentrate their spending with the brand.

Common types of co-branded cards

The co-branded card landscape spans numerous industries, with each sector leveraging unique value propositions to attract and retain customers:

Travel-based (airlines, hotels, cruise lines)

Travel co-branded cards are a perfect example of the potential of strategic partnerships. Airline cards typically offer accelerated miles earning on ticket purchases, free checked bags, priority boarding, and pathways to elite status. 

Hotel cards similarly provide point accumulation for property stays, automatic status tier upgrades, and free nights each year, while cruise line cards offer perks like onboard credits, discounts, and exclusive experiences for cardholders

The common thread connecting these offerings is their ability to transform ordinary spending into exceptional travel experiences, creating emotional connections far stronger than traditional rewards programs.

Retail-based (Amazon, Walmart, department stores)

Retail giants leverage co-branded cards to deepen their relationship with frequent shoppers. These cards typically feature enhanced cashback or points on purchases made within their stores or websites, special financing options for larger purchases, and exclusive cardholder events or early access to sales.

E-commerce leaders like Amazon have revolutionised this space by combining digital-first experiences with substantial rewards on platform purchases, creating a virtuous cycle that drives both card usage and marketplace spending.

Fuel & auto-related cards

Targeting specific spending categories, fuel and automotive co-branded cards deliver maximum value in areas where consumers have consistent, necessary expenses. These offerings typically feature significant rebates on fuel purchases, maintenance services, and automotive accessories, sometimes with tiered rewards that increase with spending volume.

For frequent drivers or commuters, these specialised cards transform unavoidable expenses into meaningful rewards, building brand loyalty through practical everyday savings.

Pros & cons of co-branded cards

As with any financial product, co-branded cards come with distinct advantages and considerations that businesses should evaluate against their strategic objectives:

Pros: rewards, discounts, brand perks, status upgrades

The rewards ecosystem represents perhaps the most compelling advantage for consumers. Co-branded cards typically offer accelerated earning rates on brand-specific purchases, creating a powerful incentive for cardholders.

Beyond points and cashback, exclusive discounts available only to cardholders create a sense of "insider status" that deepens brand affinity. Many programs also include unique perks tailored to the brand experience, for example: priority services, exclusive access, or enhanced customer support, that transform the traditional transaction into a premium relationship.

For aspirational brands, especially in travel and luxury sectors, status upgrades included with card membership provide a taste of premium experiences that often convert customers into long-term brand advocates.

Cons: high APRs, limited redemption, brand lock-in

Despite their advantages, co-branded cards typically carry higher interest rates than no-frills financial products. For customers who occasionally carry balances, these elevated APRs can potentially offset the value of earned rewards.

Redemption limitations also present potential friction points. Many programs restrict how and where rewards can be used, creating occasional frustration when consumers encounter blackout dates or availability constraints, particularly in travel-focused programs.

Perhaps the most significant strategic consideration is brand lock-in risk. Tying rewards too exclusively to your own ecosystem might boost short-term engagement but could create vulnerability if competitive offers emerge or if your brand experiences challenges. The most sustainable programs balance brand-specific value with flexibility that acknowledges diverse consumer needs.

By carefully weighing these factors against your business objectives and customer preferences, you can design a co-branded card program that delivers meaningful value while avoiding common pitfalls that undermine long-term success. 

Ensure that you understand the particular offerings of the card program management system you intend on using to see how these cons might affect your decisions. 

How to implement a successful co-branded card program

Launching an effective co-branded card initiative requires partnering with the right provider - one offering white-label solutions that can be customised to your specific needs while handling the complex regulatory and operational requirements.

The implementation process typically involves:

1. Designing card aesthetics that reinforce your brand identity
2. Creating a compelling rewards structure aligned with your business goals
3. Developing marketing strategies to drive card adoption
4. Establishing systems to track program performance

The most successful programs treat co-branded cards not as mere payment tools but as extensions of their customer experience strategy.

With Tap, we work closely with the company launching the product, from an intricate overview of the process to ironing out the finer details to handling all technical and regulatory elements. Contact us here for a clearer look at how your business can leverage the benefits of co-branded cards. 

Why now is the time to consider co-branded cards

As digital transformation accelerates across industries, the companies that create seamless, value-added experiences for customers gain significant competitive advantages. Co-branded cards represent a unique opportunity to extend your brand presence into your customers' everyday financial lives.

With flexible white-label solutions now available, businesses of all sizes can implement sophisticated card programs without massive infrastructure investments. The barrier to entry has never been lower, while the potential benefits remain substantial.

Whether your goal is strengthening customer relationships, opening new revenue channels, or gathering deeper customer insights, co-branded cards offer a versatile solution that delivers across multiple business objectives.

By partnering with the right payment solution provider, you can transform ordinary transactions into powerful brand touchpoints - converting each swipe, tap, or digital payment into another opportunity to reinforce your relationship with customers, and potentially earn revenue too.

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Want to expand your brand, boost customer loyalty, and unlock new revenue streams - without the cost or complexity of building your own financial infrastructure? White label card solutions do all this (and, you guessed it, more). 

These fully customisable payment products, from physical to digital cards, let businesses seamlessly enter the world of embedded finance. In an era where speed, innovation, and customer experience set market leaders apart, offering your own branded payment cards can give you the competitive edge you need.

How do white label card solutions work?

White label card solutions operate through partnerships between businesses and specialised card issuance platforms that handle the technical and regulatory aspects of payment cards. 

These solutions typically involve collaboration between the business (program manager), a banking partner (the licensed issuer), and a technology provider that manages the card program infrastructure (in this case, Tap). 

The process typically follows these steps:

• A business partners with a white label card provider (Tap)
• The provider handles backend infrastructure, compliance, and processing
• The business applies its branding and determines card features
• Cards are issued to customers under the business's brand

Different types of white label cards serve various business needs:

• Debit cards link to customer accounts and withdraw funds directly
• Credit cards provide revolving credit lines with various repayment options
• Prepaid cards allow customers to load funds in advance for future spending

Modern white label solutions leverage robust APIs for seamless integration with existing business systems, enabling customisation of everything from application processes to transaction notifications and rewards programs.

The strategic advantage of branded cards

When businesses implement branded cards into their service portfolio, they're doing more than just adding a payment option – they're creating an extension of their brand that customers interact with daily. 

These white-label card solutions allow companies to maintain complete brand consistency while leveraging sophisticated payment technology that would otherwise require significant investment to develop internally.

Financial service providers aren't the only businesses benefiting from this approach. Companies across sectors – from retail and travel to healthcare and professional services – are discovering how branded cards can transform customer relationships and create new revenue streams.

Key benefits of white label card solutions

Branding and customisation

White label cards serve as powerful brand reinforcement tools through both physical and digital card designs that maintain visual identity. Every transaction becomes a brand interaction, increasing visibility and recognition. Businesses can customise card designs, packaging, and digital experiences to create a cohesive brand ecosystem.

Fast market deployment

Traditional card program development can take years and millions in investment. White label solutions compress this timeline dramatically, allowing businesses to launch card programs in weeks rather than years, accelerating time-to-market and competitive advantage.

Increased revenue streams

Beyond enhancing customer experience, branded cards also create tangible financial benefits. Companies implementing these solutions typically see:

• Revenue from interchange fees
• Increased customer retention and lifetime value
• Higher average transaction values
• Reduced customer acquisition costs through enhanced service offerings

These financial advantages often make branded card programs self-sustaining or even profitable in their own right, transforming what might be considered a cost center into a revenue generator.

Customer loyalty and engagement

Custom rewards programs aligned with specific business offerings create powerful incentives for continued engagement. By connecting card usage with core business services, companies create virtuous cycles that strengthen both payment card usage and primary service engagement.

Data insights and analytics

White label card programs provide comprehensive data insights on customer spending patterns and preferences. These insights allow businesses to refine offerings, personalise marketing, and identify new opportunities based on actual customer behaviour.

Beyond traditional banking: the evolution of card solutions

The fintech revolution has democratised what was once the exclusive domain of traditional banks. Today's white-label card solutions offer businesses unprecedented flexibility and control. These capabilities allow businesses to not just participate in the financial ecosystem but to actively shape it according to their unique value proposition.

White label card security and compliance

Security and regulatory compliance form the foundation of successful white label card programs. Modern solutions incorporate multiple layers of protection:

• Advanced security features: EMV chips, tokenisation, and 3D Secure technology protect transactions from fraudulent activity
• Regulatory compliance: Established providers handle complex requirements including PCI DSS, KYC/AML regulations, and financial licensing
• Custom controls: Businesses can implement specific spending rules, transaction limits, and merchant category restrictions
• Real-time monitoring: Sophisticated fraud detection systems identify unusual patterns and potential threats before they result in losses

Working with experienced white label providers ensures these critical security and compliance components are properly managed while allowing businesses to focus on their core competencies.

Creating seamless customer experiences

Modern consumers expect frictionless experiences across all touchpoints with a brand. Branded cards enable businesses to extend this seamless experience into payment interactions, whether online or in person. By controlling the card experience, companies can ensure consistency at every stage of the customer journey.

This seamless integration becomes particularly valuable when businesses can connect card usage with their core services. For example, a travel company's branded card might offer enhanced rewards for bookings, creating a virtuous cycle that strengthens both card usage and primary service engagement.

Comparison: White label vs. custom-built card solutions

Businesses considering card issuance typically evaluate two approaches:

White label solutions:

• Lower upfront investment
• Faster implementation (weeks/months vs. years)
• Reduced regulatory burden
• Ongoing operational support
• Limited by provider's capabilities

Custom-built solutions:

• Complete control over features
• Potentially lower per-transaction costs at scale
• Greater differentiation potential
• Significant expertise required
• Higher regulatory and compliance burden

For most businesses, white label solutions provide the optimal balance between customisation and practicality, allowing them to focus resources on their core competencies while still delivering compelling financial products.

In terms of timelines, Tap’s streamlined process takes your white label card solution from concept to delivery in just 12 weeks. 

How to choose the right white label card provider

Selecting the right partner for your white label card program requires careful evaluation of several factors:

• Customisation depth: How much control will you have over card appearance, features, and user experience?
• Technical integration: Does the provider offer robust APIs and documentation that align with your technical capabilities?
• Compliance expertise: What regulatory requirements will the provider handle, and what remains your responsibility?
• Scalability: Can the solution grow with your business and accommodate increasing transaction volumes?
• Support structure: What level of ongoing assistance is available for both technical and operational issues?

Leading providers differ in their strengths, with some focusing on specific verticals or use cases. The right choice depends on your specific business needs, technical resources, and growth objectives.

Future trends in white label card solutions

The white label card industry continues to evolve rapidly with several emerging trends:

• Digital-first cards: Virtual cards becoming primary with physical cards as optional supplements
• Crypto integration: Adding crypto capabilities to traditional card products
• Buy Now, Pay Later: Incorporating flexible payment options within white label offerings
• AI-enhanced features: Sophisticated spending insights and fraud detection through artificial intelligence
• Embedded finance expansion: Cards becoming entry points to broader financial service ecosystems

For forward-thinking businesses, the question isn't whether to explore branded card offerings – it's how quickly they can be implemented to capture the substantial benefits they provide.

Getting started without the complexity

The technical complexity that once made card issuance prohibitively difficult has been eliminated by modern fintech platforms. Today's white-label solutions handle regulatory compliance, fraud prevention, and technical integration, allowing businesses to focus on what they do best.

By partnering with the right platform, companies can launch branded card programs quickly, creating lasting competitive advantages that will be increasingly difficult for latecomers to overcome.

To learn more about how white label card solutions can influence your specific business, fill in your details here and a specialised account manager will walk it through with you.

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Looking for a competitive edge? White-label card programs let SMEs launch branded payment cards - without the hassle of becoming a financial institution.

This guide breaks down how white-label cards work and how they can boost revenue, enhance customer loyalty, and streamline operations - all while keeping you in control.

Introduction to card issuing for SMEs

Traditionally, only banks could issue payment cards. But fintech innovation has changed that - now, SMEs can launch their own branded cards with white-label solutions, without the complexity of obtaining a banking license.

This isn’t just about processing payments - it’s about unlocking new revenue, strengthening customer relationships, and ensuring top-tier security and compliance. With the right partner, you get all the benefits of card issuing without the complexity of a banking license.

Understanding card issuing for SMEs

The process of implementing a white-label card program is more straightforward than many businesses realise. By partnering with a trusted card issuing platform like Tap, SMEs can easily launch their own branded cards without having to worry about things like technical infrastructure and regulatory requirements. 

These platforms provide robust APIs and intuitive dashboards that allow SMEs to manage their card programs effectively.

In a nutshell: modern card issuing platforms act as a bridge between your business and the complex financial infrastructure required for card issuance. They handle the heavy lifting of payment processing, security protocols, and regulatory compliance while allowing you to maintain control over the customer experience and branding.

Benefits of card issuing for SMEs

White-label card programs offer numerous advantages for growing businesses:

Increased revenue opportunities

By offering branded payment cards, businesses can generate additional revenue through interchange fees, subscription models, and value-added services.

Enhanced brand visibility

Custom-branded cards serve as a constant reminder of your business in customers' wallets, strengthening brand recognition and loyalty.

Improved financial control 

Advanced reporting and monitoring tools provide real-time insights into spending patterns and financial flows, enabling better business decisions.

Superior customer experience

White-label cards can be seamlessly integrated with your existing services, providing customers with a unified, branded experience across all touchpoints.

Best practices for managing card issuing

Success with white-label card programs requires careful attention to several key areas:

Financial planning

Consider not just the initial setup costs but ongoing operational expenses. Many platforms offer scalable pricing models that grow with your business.

Integration strategy

Choose a platform that easily integrates with your existing systems, from accounting software to customer relationship management tools.

Brand consistency

Leverage customisation options to ensure your cards reflect your brand identity while maintaining professional design standards.

Security infrastructure

Implement robust security measures from day one, including encryption, tokenisation, and real-time fraud monitoring.

Compliance and regulations

Regulatory compliance is a critical aspect of card issuing that quality white-label solutions should handle seamlessly. Your platform provider should ensure:

• Automatic updates to comply with changing regulations
• Built-in KYC (Know Your Customer) and AML (Anti-Money Laundering) protocols
• Regular security audits and certifications
• Clear documentation of compliance procedures

Fraud prevention

Modern white-label card solutions incorporate sophisticated fraud prevention measures:

• Real-time transaction monitoring
• Machine learning algorithms for fraud detection
• Customisable spending controls and limits
• Instant card freeze capabilities
• Automated alerts for suspicious activities

Seamless card issuing, maximum business growth

White-label card programs give SMEs the power to expand services, boost revenue, and build stronger customer loyalty, without the hassle of managing financial infrastructure. With the right platform partner, launching a branded payment card is faster and easier than ever.

Tap takes care of the complexities so you can focus on growth. Ready to get started? Contact us today and let’s bring your white-label card program to life.

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Card programs are no longer just a feature, they’ve become a competitive advantage. From fintech startups to global enterprises, businesses are embedding financial services into their ecosystems to improve customer retention, unlock new revenue streams, and gain a market edge. With embedded finance projected to reach $570.9 billion by 2033, the time to act is probably now.

This comprehensive guide explores the intricacies of card program management and its crucial role in business success. 

Why businesses are integrating white-label card programs

Beyond branding benefits, white-label card programs provide businesses with complete control over the customer journey, access to valuable transaction data, and new revenue opportunities. Thanks to advancements in fintech infrastructure, companies can integrate financial services seamlessly without requiring a financial license.

However, the timing is optimal. With the potential to increase top-line revenue, white label cards enable businesses to:

• Own the complete customer journey
• Gather valuable transaction data
• Differentiate their offering
• Create new customer touchpoints

As industry leaders increasingly make white-label cards central to their digital transformation, the opportunity for competitive advantage grows.

What is card program management?

Starting with the basics, card program management involves overseeing and coordinating payment card services, from design to day-to-day operations. This ensures that cards run smoothly and meet regulatory standards.

Key responsibilities of program managers:

• Strategic planning – Defining objectives, market positioning, and growth strategies.
• Compliance & risk management – Ensuring adherence to PCI DSS, AML, and KYC while mitigating fraud risks.
• Operational oversight – Managing banks, processors, and card networks for seamless transactions.
• Customer experience optimisation – Enhancing user experience with smooth onboarding, rewards, and support.

Program managers also go beyond administrative tasks by setting up risk frameworks, enforcing compliance controls, and improving customer experiences, while managing costs. They play a balancing act between regulatory demands and business goals, while managing relationships with service providers, like card manufacturers and tech vendors.

By connecting all these elements, program managers create a seamless, well-functioning payment card ecosystem that delivers success and efficiency.

The strategic importance of card program management

The complexity of launching and managing a card program extends far beyond just simple payment processing. Modern businesses require robust management systems and abilities that address multiple critical areas, including:

Compliance and regulatory management

Card program management plays a crucial role in navigating the complex regulatory landscape. This includes ensuring adherence to:

• Payment Card Industry Data Security Standard (PCI DSS) requirements
• Anti-Money Laundering (AML) protocols 
• Know Your Customer (KYC) standards. 

These crucial compliance measures protect both the business and its customers while maintaining the integrity of the financial system.

Risk and fraud prevention

In an era of sophisticated financial crimes, comprehensive risk management is paramount. Effective card program management incorporates advanced fraud detection systems, real-time transaction monitoring, and efficient dispute resolution processes. 

This proactive approach helps minimise financial losses while maintaining customer trust.

Operational excellence

Managing relationships with multiple third-party providers requires sophisticated coordination. Typically, a team of program managers oversee interactions with issuing banks, card networks, and processors, ensuring smooth operations across the entire payment ecosystem. 

Customer experience enhancement

Successful card programs focus on more than just functionality — they prioritise exceptional customer experiences. This includes smooth onboarding, responsive support, and value-added features like rewards and personalised services that drive engagement and loyalty.

How card program management works

The successful implementation of a card program requires a collaborative approach between program managers and the client organisation. The following is an example of a framework that is structured to ensure seamless execution while maintaining compliance and operational excellence. 

Program design and implementation

This foundational phase requires active participation from both parties:

Client organisation responsibilities:

• Define target user groups and program objectives
• Provide branding assets and guidelines
• Establish internal governance structure
• Determine program budget and KPIs

Program manager deliverables:

• Configure program features and parameters
• Implement compliance frameworks
• Set up risk management systems
• Design operational workflows

Technical integration and onboarding

The integration phase combines technical expertise with organisational readiness:

Client organisation responsibilities:

• Designate technical integration team
• Complete required compliance documentation
• Establish internal user management processes

Program manager deliverables:

• Secure BIN (bank identification number) sponsorship
• Implement digital wallet integration
• Configure secure account setup processes
• Set up fraud prevention systems

Program monitoring and optimisation

Ongoing program success relies on collaborative oversight:

Client organisation access:

• Real-time dashboard monitoring
• Custom report generation
• User activity tracking
• Expense management tools

Program manager services:

• Transaction monitoring and analysis
• Fraud detection and prevention
• Performance optimisation recommendations
• Compliance and risk assessment

This structured approach ensures the program manager provides the technical infrastructure and expertise, while the client organisation maintains control over strategic decisions and user management.

The key players in card program management

Effective card program management relies on the collaboration of key stakeholders, each playing a crucial role in ensuring seamless operations and compliance. These include:

Issuing banks

These regulated financial institutions hold the necessary licenses and provide the fundamental banking infrastructure that enables card issuance and transaction processing.

Card networks

Organisations like Visa and Mastercard maintain the payment networks that enable global card acceptance and establish operating rules that govern transaction processing.

Issuer processors

These technology providers handle the complex backend operations of transaction processing, settlement, and compliance management.

Card manufacturers

Specialised vendors are responsible for producing physical cards and implementing secure virtual card solutions.

At Tap, our white-label card services take care of all of the above, liaising with you on the finer details. 

Choosing your management approach

Organisations must carefully consider their approach to card program management:

Self-managed programs 

Maximum control but high complexity. Ideal for businesses with in-house regulatory and tech expertise.

Outsourced management 

Faster to market with lower operational costs. A great option for businesses looking to launch quickly without building infrastructure.

Hybrid solutions 

A flexible approach that allows businesses to maintain control over key functions while outsourcing technical or regulatory aspects. Tap’s white-label solutions cater to businesses seeking a balance between control and convenience.

Future trends shaping card program management

The future of card program management is being shaped by several key trends:

Embedded finance

The integration of payment solutions into non-financial products and services is creating new opportunities for businesses to enhance their value propositions and generate additional revenue streams.

Advanced analytics and AI

Artificial intelligence and machine learning are revolutionising fraud prevention and customer experience optimisation, enabling more sophisticated risk management and personalisation capabilities.

Digital-first solutions

The increasing preference for virtual cards and mobile payments is driving innovation in digital payment solutions and program management approaches.

Conclusion

Effective card program management has become a crucial capability for businesses seeking to compete in today's digital economy. Whether through self-managed programs, outsourced solutions, or hybrid approaches, organisations must carefully consider their options and choose strategies that align with their business objectives and operational capabilities.

Success in card program management requires a comprehensive understanding of the ecosystem, strong attention to compliance and risk management, and a commitment to delivering exceptional customer experiences. As the payment landscape continues to evolve, businesses that master these elements will be well-positioned to capitalise on new opportunities and drive sustainable growth.

Launching a successful card program requires the right expertise, technology, and compliance framework. At Tap, we handle the complexities so that you can focus on growth. Ready to elevate your business with a white-label card program? Contact us to explore how our white-label solutions can fit your business needs.

Imagine walking into your favourite store and finding everything 10% cheaper than last month. Sounds great, right? But what if your salary also dropped by 15%, and your home's value plummeted by 20%? Welcome to the complex world of deflation – an economic phenomenon that turns the simple act of waiting to make a purchase into a nationwide economic strategy, and not in a good way.

While we often worry about prices going up, deflation shows us why prices going down can be just as threatening to our economic well-being. In this guide, we'll uncover why some lose sleep over falling prices, explore real-world examples that have shaped nations, and understand why a healthy economy is all about finding the right balance.

What is deflation?

Deflation is when prices of goods and services decrease across the economy over time. It's essentially the opposite of inflation, which is what we're more familiar with (when prices going up year after year).

To put it simply: if inflation means your dollar buys less tomorrow than it does today, deflation means your dollar will buy more tomorrow than it does today.

Imagine walking into your local grocery store and noticing that milk costs $3.50 this month, down from $3.75 last month. Then next month, it drops to $3.25. If this pattern happens across many products and services throughout the economy, that's deflation in action.

Is deflation good or bad?

It's tempting to think deflation is great news (spending less on groceries does sound like the dream). Unfortunately, the reality is more complicated.

The good side:

• Your purchasing power increases
• Your savings are worth more without doing anything
• Essential goods become more affordable

The not-so-good side:

• People delay purchases (why buy today if it'll be cheaper tomorrow?)
• Businesses earn less revenue, leading to potential layoffs
• Debt becomes more burdensome (you owe the same amount, but money is worth more)

The biggest danger is what economists call the "deflationary spiral." This is when falling prices lead to lower production, which causes job losses, which reduces spending power, which pushes prices down further... and the cycle continues downward.

What causes deflation?

Deflation doesn't just happen randomly. There are several key triggers:

1. Contraction in money supply

When there's less money circulating in the economy relative to the goods and services available, prices tend to fall. This can happen when central banks tighten monetary policy or when credit markets freeze up during financial crises.

2. Decreased consumer demand

When people spend less, whether due to economic uncertainty, rising unemployment, or shifting preferences, businesses often respond by lowering prices to attract customers.

3. Increased productivity or efficiency

Sometimes deflation happens for positive reasons. When companies find ways to produce more goods with fewer resources (like through technological innovation), they can pass those savings on as lower prices. Yes, for profit-hungry companies - this is rare, but it’s still possible. 

4. Government and central bank policies

Certain fiscal and monetary decisions can inadvertently trigger deflation, especially if they're too restrictive during economic downturns.

How is deflation measured?

Just like inflation, deflation is typically measured using price indexes, with the Consumer Price Index (CPI) being the most common. When the CPI shows a negative percentage change over time, that's deflation.

It's important to distinguish between:

• Deflation: A general decrease in prices (negative inflation rate)
• Disinflation: When inflation slows down but prices are still rising, just at a slower rate
• Inflation: A general increase in prices over time

Economists look at various sub-indexes too, as deflation might affect different sectors differently. For example, technology products have experienced their own form of deflation for decades, even during periods of overall inflation.

What are the effects of deflation?

Short-term benefits for consumers

In the immediate term, consumers might celebrate as their money stretches further. Essential goods cost less, and savings seem to grow in value automatically.

Long-term consequences

The longer-term picture is where things get problematic:

• Delayed purchases: Consumers postpone buying non-essential items, expecting even lower prices in the future.
• Business challenges: Companies face declining revenues while many of their costs remain fixed.
• Job market impact: As businesses struggle with reduced profits, layoffs often follow, increasing unemployment.
• Wage deflation: Eventually, wages start to decrease too, offsetting any benefit from lower prices.

The deflationary spiral explained

The most feared consequence is the deflationary spiral:

1. Prices fall
2. Consumption decreases (as people wait for even lower prices)
3. Production cuts follow
4. Unemployment rises
5. Less money is spent in the economy
6. Prices fall further
7. Repeat

This vicious cycle is what turned the 1929 stock market crash into the Great Depression, which is why central banks are typically quick to fight even hints of deflation.

Why deflation makes debt worse

One of deflation's cruellest effects is on debt. Here's why:

When prices and potentially wages fall, but your debt stays the same, the real burden of that debt actually increases. Imagine you have a $250,000 mortgage:

• During inflation: Your income likely rises over time, making that fixed payment feel smaller in proportion to your earnings.
• During deflation: Your income might decrease, but your mortgage payment remains unchanged, taking a bigger bite out of your budget.

Plus, the value of the asset you purchased (like a house) might decrease during deflation, potentially leading to negative equity (owing more than the asset is worth).

This debt burden effect can ripple through the economy, leading to increased defaults, foreclosures, and bankruptcies.

How does deflation affect the economy?

The broader economic impacts of deflation can be severe:

Recession and depression risks

Extended periods of deflation are strongly associated with economic contractions. The most famous example is the Great Depression, when U.S. prices fell by roughly 25% between 1929 and 1933.

Reduced business investment

When companies expect falling prices and revenues, they're less likely to invest in new projects, equipment, or employees. Why expand when you expect smaller returns?

Central bank challenges

Fighting deflation can be harder than fighting inflation. While central banks can always raise interest rates to combat inflation, there's a limit to how far they can cut rates to fight deflation (known as the "zero lower bound" problem).

Banking system stress

As borrowers struggle with the increasing real value of their debts, loan defaults rise, potentially threatening financial stability.

Can deflation ever be a good thing?

Yes, in certain contexts, deflation isn't necessarily bad:

Technological deflation

The consistent price drops in electronics like TVs, computers, and smartphones represent a form of "good deflation." These price decreases stem from innovation and efficiency gains, not economic distress.

Sector-specific benefits

Some industries might benefit from deflation in their input costs. For example, manufacturing businesses might enjoy lower raw material prices even if it creates challenges elsewhere.

Short-term vs. structural deflation

Brief episodes of mild deflation don't always spell disaster. It's the persistent, economy-wide deflation that raises red flags for economists.

The key difference is the cause: deflation from increased productivity and technological advancement is generally positive, while deflation from collapsed demand is problematic.

How do governments and central banks fight deflation?

When deflation threatens, policymakers have several tools at their disposal:

Monetary policy tools

• Lowering interest rates: Making borrowing cheaper to encourage spending and investment
• Quantitative Easing (QE): Central banks purchase assets like government bonds to increase money supply
• Forward Guidance: Promising to keep policies accommodative for extended periods to build confidence

Fiscal policy approaches

• Government spending: Increased public expenditure on infrastructure and services
• Tax cuts: Reducing tax burdens to boost consumer spending power
• Direct payments: Stimulus checks or universal basic income proposals

What happens to investments during deflation?

Different asset classes perform very differently during deflationary periods:

Cash and high-quality bonds

Cash and government bonds often perform well during deflation because their fixed returns become more valuable as prices fall. However, if deflation leads to a severe economic crisis, even government bonds could face risks.

Stocks and real estate

Equities and property typically struggle during deflation because:

• Corporate profits decline as prices fall
• Real estate values drop while mortgage debt remains unchanged
• Dividend payments may be reduced as companies conserve cash

Defensive investment strategies

Some approaches that might help protect portfolios include:

• Focus on companies with strong cash positions and minimal debt
• Prioritise businesses selling essential goods with inelastic demand
• Consider some allocation to Treasury bonds as a hedge
• Look for companies with pricing power that can maintain margins even in challenging environments

The bottom line

While falling prices might sound appealing at first glance, deflation presents serious economic challenges that can affect everyone from homeowners to business owners to workers. Understanding these dynamics helps explain why economists and policymakers go to such lengths to maintain a small but positive inflation rate.

Rather than hoping for prices to fall, most experts suggest that the healthiest economy is one with stable, low inflation, allowing for gradual price increases while avoiding the deflation trap that can be so difficult to escape.

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