Aaron Frank admits he was an "expert in credit cards" only because he had a credit card when he dove into the payments industry three years ago with the idea to launch a new type of card portfolio.

As CEO, Frank built a team of ambitious entrepreneurs and payments pros to research the credit card business and land a partner bank to launch the Final card, a combination of a plastic card and the ability for a user to create numerous PANs, or digital cards, for online purchasing or to use only with specific merchants.

The end result is that Oakland-based Final created a twist on the traditional payments ecosystem in that it seeks to operate as card-issuing-as-a-service with Visa branded cards on existing payments rails.

Aaron Frank, CEO of Final

Final is not creating virtual cards, per se, which are generally digital versions of a regular card or something created as a one-time token. "Rather, the Final cards created digitally for displayed on phones or on the web can have various controls built in from one-purchase use, to one authorization for multiple purchases, or one-time uses for travel purposes or ongoing transactions at a specific merchant," Frank said.

First Bank & Trust in South Dakota operates as the bank partner to provide the BIN for the cards and offer digital technology to its customers. Final uses Oberthur Technologies for printing and production of the plastic cards, and technology provider Vantiv as the network gateway provider.

"It was a heavy lift for us to find something that we could do as a fully Card Act compliant credit card program and find a solution for the digital cards that would work on the network," said Alex Cramer, head of cards for Final.

"The credit card industry has a lot of legacy baggage, with even some of the newer software being almost 20 years old, and we had to determine how to take that technology and change it," said Cramer, who had previous experience in launching the Sapphire Card at Capital One.

While much work in the industry focuses on creating virtual cards for business-to-business payments or business travel payments, Final is first focusing on the potential for consumers to have the option to create various cards with customized controls.

"When you think about the possibilities for consumers here, it is really a broad opportunity, in part, because of the basic insecurity people have about online transactions," said Brian Riley, director of card services for Mercator Advisory Group. "This concept is good and it looks like Final has a well-designed program for it."

Achieving high numbers of card users will be an uphill climb for Final, but it also bodes well for the company that its card rate of 18% is not too high and provides a good margin, Riley said.

Final actually began shipping its first cards last year, giving users the option to create new card numbers through an iOS app to use, for example, on websites they don't entirely trust. When payments to that site are complete, that card number stops working.

In that sense, Final cards simply represent another security feature that online processes like 3D Secure have been seeking to provide for several years.

While its security offering is likely to resonate with consumers, Final knows it can't strike interest in the industry on that concept alone. As such, it is not entirely interested in establishing itself simply as another security layer.

The company is focusing on consumer cards currently and will add small business card products in the future. But its long-range vision is set firmly on providing card issuing as a white label service to financial services companies and other card providers.

"We're seeing a lot of traction in 2017 for issuing as a service," Cramer said. "We are showing the technology is working, and a goal is to issue as a platform that could compete with some of the larger issuers and processors."

As with anything related to payments, obtaining scale is one of the biggest challenges. Final did not reveal exact numbers, but Cramer acknowledged the company's first moves through its banking partner have resulted in a few thousand cardholders.

An increase in card issuing through partners will make that number move upward. "What no one has thought about, or has been able to accomplish, is providing an ISO on the issuing side of the business," CEO Frank said. "On the acquiring side you have ISOs, aggregators and gateway providers. You don't have that on the issuing side and we are trying to put together that model."

Final doesn't have to have 1,000 product lines to offer to create an interest in issuing-as-a-service, Frank added. "Maybe about 20 products is a good place to start and see how a turnkey service works."


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