Tutorial: Creating a Secured Credit Card
Mbanq Cloud's CORE capabilities enable fintechs and neo banks to offer secured credit cards, streamlining the process by reducing the need for extensive credit reviews. These cards are ideal for those with minimal or no credit history, or individuals looking to manage their finances more effectively. Customers benefit from secured credit cards as they link to a savings or checking Account, allowing for precise spending control based on account balances. This setup prevents overspending and facilitates automatic payment deductions to avoid late fees. Similar to traditional credit cards, secured cards allow purchases anywhere credit cards are accepted, with the deposit serving as a fallback only if the user defaults on a payment. This enables users to build or improve their credit score by making timely payments, thereby enhancing their financial stability while enjoying the convenience of credit. Through Mbanq Cloud, fintechs and neo banks can efficiently introduce secured credit cards, empowering their customers to manage their finances and build credit effectively.
Product Setup
Before Platform issues credit cards, the credit program must be approved by the sponsoring bank. The terms of this approval are used to configure different products on the Mbanq system. Mbanq’s Product team is responsible for creating all necessary products on Mbanq system to support credit card issuance. The Product ID’s of each of the created products will be used for calling Credit Card APIs
The following credit products are created on the Mbanq system:
Account Product - Account Product ID is used for creating reserve accounts for clients
Credit Product: Credit Product ID is used for creating card products
Card Product: Card Product ID is used for creating and issuing credit cards to clients
Credit Card Flow
The following CORE APIs are used for issuing credit cards to the platform’s end users. The card issuing APIs are used for creating and managing credit cards, get transactions, payment history etc.
Create Client
Based on the Platform’s onboarding flow i.e, Issuing a credit card to new user or existing user, the Client must be created using the Create Client API and KYC must be successfully processed before activating the client. Please refer to Tutorial: Client Onboarding for a detailed onboarding process. This step can be skipped if the client is already active on the Platform.
Create Account
An regular checking account must be created for a client in order to issue a secured credit card. The user will be funding the collateral amount to this particular account from which the funds will be debited and held as reserve once the credit account is created and approved.
Create Credit Account
Use the API Create Credit Account to define the terms of credit card and create a credit card application. use the Card Product ID provided by Mbanq to specify the secured credit product and pass the appropriate Interest Rate, Credit Limit, etc. along with the client id and the current account id.
Approve Credit Account
After receiving consent/signature from the user for the said credit terms, use the API approve credit card to activate the credit card. On invoking this API the amount equivalent to the credit limit will be debited from the current account and placed on hold on the reserve account and the secured account will be ready to use
Order Card
Once the credit account is approved and active, the card can be ordered. Based on the requirement either a virtual or a digital first card can be ordered. Please refer to the card issuing section in the API documentation for ordering, shipping and viewing the virtual card image.
Credit Account Operations
Use the below list of APIs for performing any credit card related operations such as, get transactions, view payment history, get payment due, etc.
Updated 13 days ago