How to get started with Synctera Smart Charge Card
What are Synctera Smart Charge Cards? Our VP of Lending, Min Ma, provides the rundown on:
- Our newest credit product
- How to start building and issuing secured charge cards
- Benefits for businesses and consumers
VP of Product, Lending
Min leads Synctera's offerings of Secured and Unsecured lending products
In October, Synctera hosted a special party in Las Vegas, where we brought together over 1,000 of FinTech’s best and brightest for a night of fun.
It was the perfect place to announce our newest line of products: Synctera Smart Charge Cards. For those of you who missed it, don’t worry - we’re hosting more events soon.
But today, I’ll give you the rundown:
The details on Synctera Smart Charge Cards and how to get started
What charge cards are and how they differ from credit cards
The benefits of charge cards: for people and business
Our first Synctera Smart Charge Card: a secured version for retail consumers
What is Synctera Smart Charge Card?
Synctera Smart Charge Card is a new Banking as a Service (BaaS) credit product companies of all sizes - from startups to large enterprises - can access to build, launch, and issue charge cards to their customers via a simple set of APIs.
Companies that launch Synctera Smart Charge Cards also get access to our company's banking tooling, including:
Bank account and debit card issuance
And a host of other features
Two extra important things to call out:
Accounts and money movement are supported by a sponsor bank partner from Synctera’s growing network.
Interchange revenue on charge cards can be up to double what companies can earn with debit cards, providing companies with greater flexibility to reward their end customers.
Companies that build and issue card products with Synctera can earn revenue from interchange fees.
Ready to start building? Check out our API documentation to see how you can quickly launch and issue Synctera Smart Charge Card to your customers.
A charge card is similar to a credit card, with two main exceptions:
Charge cards don't have a credit limit
Charge card balances have to be paid in full every month
Typically, utilizing more than 30% of a credit card’s credit limit is detrimental to a cardholder’s credit score. However, utilizing a large percentage of a charge card’s available credit does not have the same effect; because charge cards don’t have a credit limit, credit bureaus view charge card balances differently from credit card balances.
On pricing and economics: charge cards may come with annual fees and/or fees for late payment. Notably for issuers, charge cards have the same interchange rates as credit cards - up to 2x what debit cards provide.
Synctera's first offering: A consumer secured charge card
The first Synctera Smart Charge Card product is a secured charge card for retail consumers.
Unlike a traditional charge card, this product does not require its holder to have a long, rich credit history – a customers’ funds in a linked deposit account acts as security for the credit being extended to them.
With Synctera’s secured charge card, the cardholder is able to withdraw available funds from the linked deposit account at any time, making it more flexible than traditional secured credit cards which sometimes require a security deposit to stay locked for a number of years.
In addition, secured charge cards products can be leveraged in a novel way to help people build or rebuild their credit as a result of a key feature - utilization. Charge card utilization isn’t reported to credit reporting agencies, but, on-time payments are. As a result, a secured charge card could prove to be a useful tool to help the millions of credit invisible Americans.
Companies may decide to launch secured charge cards to better serve customers who are seeking a smart way to manage spending, stay on budget, or those who need a more convenient payment option than prepaid cards (more in the next section).
Why would customers choose a secured charge card over a debit card?
Since a customers’ funds in a linked deposit account acts as security for the credit being extended to them, both debit cards and charge cards only allow customers to spend what they have in their account - nothing more.
But, there's a key benefit: charge cards run on credit rails, making them more convenient than debit cards in a number of real-world scenarios like renting hotel rooms, putting down security deposits for large purchases, and more.
Let's use renting a car as an example to illustrate how a secured charge card could be used in place of a debit card to help improve a customers' experience:
More convenience in customer onboarding: Enterprise Rent-A-Car will only accept debit cards for car rentals at airports if a customer provides and completes additional paperwork on top of the standard-issue rental agreement.
Mitigating impacts to credit scores: Some car rental companies require a credit check for debit card transactions, potentially impacting a person's credit score.
Less money locked away: The hold placed on transactions initiated by debit cards when buying fuel or even renting a car outright (like at Hertz) can be oftentimes be larger than what's required for credit or charge cards.
Customers may also choose a secured charge card over a debit card based on how businesses set up its rewards program; since revenue earned from charge cards is higher than debit cards, companies get more flexibility to expand and create unique rewards.
We’re excited to see what unique products companies of all sizes build with Synctera Charge Card.
Charge cards offer a strong value proposition that incentivizes people to use them – better experiences with a business they interact with to getting increased flexibility around building or improving credit.
Whether its loyalty points, benefits, cash back, or even interest on the funds in the linked deposit account, companies that build secured charge cards with Synctera can unlock a number of ways to design a financial product that is attractive to their customers - even if they don’t have the huge marketing budgets that credit card companies use to keep their cards “top of wallet.”
<div class="rt-btn-wrap"><a href="https://synctera.com/contact-us" class="button yellow w-button">Have more lending questions? We'll "lend" you our ears and listen</a></div>
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