The card programs that often accompany neobanking and credit builder applications can be a significant source of revenue. While providing convenience and value to their customers, and boosting power to their brand, these card programs also bring a significant share of interchange revenue every time a customer uses their card to make a transaction. The percentage of interchange revenue for each transaction depends on many factors but interchange fees have become a significant share of total revenues for most fintechs today.
The best way to think about the potential of interchange revenue is to take one real-world example and amplify it across a larger audience. For example, say you have a debit card program in place and your average customer is spending $200 a month on your card. If we estimate the interchange revenue at 1.5%, then that one customer would bring your fintech $3.00 in one month.
Depending on the revenue share agreement with the BaaS provider or partner bank, it is possible for your fintech to receive 80% of that interchange revenue or $2.40. If you multiply that across a customer base of say 30,000, that would bring $72,000 per month. The more your customers use your card to make transactions, the more they spend on the card, and the more your customer base grows, the higher the interchange revenue.