How to run an effective RFP process for card issuing solutions + Template

RFPs (Requests for Proposal) are an effective tool for evaluating card issuing providers. They allow you to collect detailed information on several vendor solutions at the same time so you can make better side-by-side comparisons.

But RFPs are only as good as the questions you ask. 

That’s why whenever I run an RFP, I like to start by googling “RFP for X.” It’s a great way to get a sense of what questions others are using to evaluate providers.

We’ve seen and responded to a lot of card issuing RFPs and one quality the best ones all have in common is that they include very detailed questions about card issuing capabilities, the implementation process, SLAs around technical support, and pricing/economics.

Based on our experience, we’ve put together a card issuing RFP template with hundreds of detailed questions to help you better evaluate vendors. These are questions that experts told us they wish they had asked their previous providers:

• What's included: Questions that dig deep into issuer processing capabilities, program management, implementation and support, compliance, and pricing.
• What's not included: Questions related to specific use cases. Every card program has its own particular nuances so you should add in questions that are unique to your requirements.

Remember, the RFP process serves two purposes: selecting the right partner and avoiding the wrong one. By clearly outlining your needs and expectations, a good RFP can help vendors quickly determine if they are a good fit for your project.

Let’s start by discussing a few ways you can run an effective RFP process.

Running an RFP for card issuing services

The key to running an RFP process is to be crystal clear about everything you need from a card issuing provider, not just the features you need for your use case. Too many companies end up with the wrong provider because they fell into the trap of grading on functionality.

The last thing you want is to be stuck with a provider that looks great on paper, but doesn’t meet any of your expectations around things like troubleshooting issues, being responsive to product requests, and meeting their SLAs and milestones.

Here are a few best practices that will help you run an effective RFP process.

Document your needs and expectations

Start by making an exhaustive list of your wants and needs. This should include specifics about your use case, necessary features, your preferred program setup, and any expectations you have around operations and support. 

No detail is too small. For example, if you’re launching a physical card, think hard about the card design options you want, the materials you want to use, where and how you want those cards shipped, how you want to manage inventory, and so on.

Make note of which items are must haves and which are nice to haves because the reality is that unless you have all the time and resources in the world, you’ll probably have to make some trade offs. (See Fast, Good, Cheap Trilemma.)

Identify the vendors you want to evaluate

Next, make a list of potential card issuing providers that you want to evaluate. Start by writing down the vendors you’re already familiar with, add to that list with referrals, and finish by tapping into online communities, analysts, and search engines.

• Referrals: Ask other fintech and card program operators about the providers they’ve used and/or evaluated. This includes your employees. Many of our customers found us because an engineer on the team was familiar with Lithic’s platform. Other sources for referrals include sponsor banks, integration partners, consultants, board members, and investors on your cap table.
  
  
• Online communities: Ask for vendor suggestions in industry peer groups. This can include Slack communities, Facebook groups, alumni networks, online and in-person clubs, industry trade groups, and forums. It’s also a good idea to gather a list of companies with similar card programs and send a note to their  product manager via LinkedIn, Twitter, or email.
  
  
• Analysts: Card issuing is a pretty niche area so while you’re unlikely to find firms like Gartner or Forrester doing detailed vendor research, there are analyst organizations that focus on fintech like Aite-Novarica Group, CB Insights, and Cornerstone Advisors.
   
• Search engines: You can round things out with a quick search on Google or Bing for card issuing providers to make sure you haven't missed anyone interesting. 

The goal isn’t to create an exhaustive list of vendors. Look for the few companies that come up repeatedly. That’s usually a good sign that they’re worth learning more about. Try to include at least one traditional player and one emerging solution in your list so you can get a sense of the range of options in the market.

Send the RFP to vendors

Most RFPs contain two documents:

1. A document that lays out the scope, selection process, and timeline
2. A questionnaire that all vendors need to fill out

Your first document can be a straightforward cover letter. As a vendor, we’ve found it most helpful when a company includes basic information about the goals of their card program, volume projections, bank and network preferences (if any), and the timeline they have in mind for the program launch. 

For the questionnaire, you can use the template included in this guide as a starting point. I encourage you to customize it to fit your specific needs and use case. 

Evaluate the responses and disqualify vendors

Once you’ve received all the responses, start evaluating and disqualifying vendors. The goal is to land on a shortlist of 2-3 finalists that you and your team can go deeper with.

A standard best practice is to develop a scoring system that will help you objectively grade each vendor’s response. Your system can include many factors, such as pricing, experience, supported functionality, level of support, quality of proposal, and references. You may also want to consider weighting some areas more heavily in relation to their importance.

If you’re evaluating a big pool of vendors, break the evaluation into phases. In your first pass, eliminate all the vendors that don’t meet critical requirements. 

Then go a level deeper and start to put vendors in three categories: average, above average, and excellent. Average meets all the needs you first identified. Above average delivers some of your wants. Excellent delivers all your wants and maybe even more. 

When you follow up with each vendor’s references, start with the excellent category and then work your way down. Ask references questions about the vendor’s products, their experience building on the vendor’s platform, the vendor's reliability and customer service, and whether the vendor has met their expectations. The goal is to get a good sense of what it’s like working with that vendor.

At the end of this exercise, review your scores and customer reference feedback with your buying team and put together your shortlist of vendors.

Conduct interviews with your shortlisted vendors

The next step is to expand your reference calls by interviewing the company’s team members and partners. Depending on the size of the company, you may also want to chat with its board members to make sure the company will be around for the foreseeable future and that their investors are committed to capitalizing the business. 

• Company: The quality of the team is as important as the company’s technical capabilities. Schedule time to meet the CEO, the head of product, the head of engineering, the head of partnerships, the person who would be your implementation manager, and the person who would be your account manager. These are the people you’ll be trusting with your card program, so make sure you have confidence in the team.
  
  
• Partners: This might not always be relevant, but if your vendor selection relies heavily on a third-party integration (such as to a ledger or loan management system), talk to those partners as part of your interview process. Ask them about the vendor’s approach to collaboration, what they think the vendor’s strengths and weaknesses are, how well the vendor integrates with their technology, and what challenges they’ve encountered while working with the vendor on projects. 

This entire interview process should tie back closely to the needs and expectations you documented in step one. If you find yourself veering off track, ask yourself whether you should revisit your original assessment or whether you need to narrow the focus of the evaluation.

Meet with the buying team and select your vendor

After completing your due diligence phase, it’s time to meet with your buying team and make a decision. Consider using the following questions to help guide your process:

• How does the vendor stack up against your needs and expectations?
• What kind of experience have you had with the team?
• What do customers and partners of the vendor have to say?
• Did the vendor provide a realistic timeline for implementation?
• Does the vendor offer a good balance of product capabilities and support services?
• Can this vendor offer me better economics (pricing/interchange share) than others?

Note: if you want more help with this step, we have a guide on how to evaluate a card issuing provider.

After you make a decision, be sure to let the finalists know why you didn’t choose them. The vendor selection process can be a long, tiring journey and vendors will appreciate your honesty and transparency. Besides, you may want to re-engage these providers in the future for different products or to add in redundancy as a secondary processor.

Card issuing areas to evaluate

The card issuing RFP template includes questions to help you evaluate a provider across five different categories including issuer processing, program management, implementation and support, security and compliance, and contract terms/economics.

Issuer Processing

The goal for this section is to understand the provider’s card issuing and processing capabilities, how well they can support your use cases, and what level of customization the platform offers.

Areas to explore: card issuance, BIN configuration, ledger capabilities, processing capabilities, authorization decisioning, transaction data, and reporting

Sample RFP questions:

• Do you support both Visa and Mastercard?
• Do you support virtual, physical, and digital wallet cards?
• List all of the BIN types that you support.
• Do you support both shared and dedicated BINs?
• Do you provide transaction level reporting with gross interchange breakdown, fees, etc?

Program Management

When it comes to program management, try to understand the roles and responsibilities between you, the provider, and the sponsor bank. This includes knowing how the program will be set up, who will manage partner relationships, and understand who is on the hook for various card program operations.

Areas to explore: daily card program operations, roles and responsibilities, compliance, included functionality, supported integrations, and program limitations

Sample RFP questions:

• What type of card programs do you currently manage?
• What program management services do you provide?
• Do you provide a bank partner to act as a BIN sponsor?
• What SLAs do you have established with the card networks and issuing banks?
• How does your bank partner deal with common problems like disputes, exceptions, or disagreements regarding card program operations?

Implementation and Support

For implementation and support, try to dig into what the implementation process looks like, what resources will be available to you during implementation, how the provider will help you prepare for bank and card network review, and what level of customer service you will receive after implementation.

Areas to explore: implementation resources, testing and simulations, self-service tools, ongoing support, and technical SLAs.

Sample RFP questions:

• Please provide a detailed checklist and description of all key milestones for getting a managed card program live.
• Please highlight critical path items and timing estimates.
• Please describe the structure of your post-implementation client services.
• Is there a sandbox environment for testing?
• What is your ticket escalation flow?

Security and Compliance

For security and compliance, you want to understand how the vendor will protect your data, ensure compliance with regulations, and help you manage chargebacks and fraud.

Areas to explore: data protection and processing, KYC/KYB processes, transaction monitoring, chargeback management, and approved vendors

Sample RFP questions:

• Can you provide your most recent SOC II Type 2 report?
• Can you provide your most recent PCI Level 1 AOC?
• List the geographies where data is processed, stored, accessed and/or transmitted.
• Please outline your AML/Sanctions program.
• What are your and/or sponsor bank’s KYC/KYB requirements?
• Do you provide a chargeback management dashboard?

Contract Terms

The last section of the RFP deals with contract terms, pricing, and interchange revenue share. 

Areas to explore: pricing model, fee structure, interchange revenue share model, contract terms, payout timing, and length of contract.

Sample RFP questions:

• What are your standard contract terms?
• What minimums or reserves does your bank require?
• Are there penalties for not meeting certain performance metrics?
• Please list all your fees e.g. implementation, platform, per network message, chargeback, dispute, etc.
• Describe your interchange revenue share model
• When do you make interchange payments?

Card programs may be nuanced and vary widely between use cases, but what they all have in common is that they are usually strategically important to the company launching them. 

Our goal with this card issuing RFP template and the suggestions in this blog is to provide you with tools to get the answers you need.

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Huge thanks to Jason Henrichs, Alex Johnson, Kevin Lou, Charley Ma, Jason Mikula, and Scott Wessman for reviewing and contributing to this template.