Why plastic cards are no longer enough for European banks

Julian Farley, Sales Director UK at BPC, explains why legacy banks need to adapt to modern issuing or risk becoming redundant and losing business as a result.

A customer opens a banking app while standing at the checkout of their favourite shop. They want to create a virtual card, add it to a wallet, and purchase the gift on their birthday they thought they could never afford, but by splitting the purchase into instalments, it now seems possible. For many fintechs, this kind of journey is already part of the product playbook. For many traditional banks, it still depends on several systems, manual workarounds, and release cycles that were never designed for instant issuing and digital banking.

This is the challenge facing the established players in Europe’s banking market. Customers have moved on. Regulation has moved on. Competition has moved on. The question is whether their issuing infrastructure has moved with them.

Europe is not waiting for a digital payments future. It is already operating inside one. In the first half of 2025, the euro area processed 77.7 billion non-cash payment transactions, up 7.7% year on year, with cards accounting for 57% of total transaction volume. Card payments reached 44 billion transactions worth EUR 1.7 trillion. The numbers show that cards remain central to Europe’s payments economy. However, the card itself has changed. It is a virtual card in a mobile app, a token in Apple Pay or Google Pay, an ecommerce instrument, a subscription credential, a corporate expense tool, or a BNPL product. It is not a physical card anymore.

Why legacy issuing infrastructure blocks growth

For years, issuing platforms were built to manage mainly physical cards, schemes, settlements, and renewals. That model worked when the card business was predictable and product change was relatively slow. It is less suitable for the market banks now face.

A fintech can launch a digital card proposition in weeks. A bank may need months to coordinate all of its channels, from issuing, mobile banking, KYC, credit decisioning, fraud monitoring, to customer communication and compliance. The issue is infrastructure.

Legacy systems slow banks down in three main ways.

First, they make product innovation harder and slower. Launching a virtual card, enabling wallet provisioning, or smoothly introducing BNPL can require heavy development and testing before pushing to production.

Second, legacy fragments the customer view, making the system weak against fraudsters. A bank may have KYC in one system, issuing in another, and digital channels elsewhere. That makes it complex to understand the customer and act in real time.

Third, they weaken operational flexibility. Banks need to adapt to regulatory change, scheme mandates, fraud patterns, and new customer expectations, but older systems often make every change more complex than it should be.

What modern issuing should enable

Modern issuing should not be treated as a simple card management replacement. It should be seen as part of the bank’s wider digital operating model.

A modern issuing platform should support instant physical and virtual card issuance, wallet tokenisation, be easily integrated with mobile and internet banking and BNPL journeys, and have clear fraud prevention mechanisms.

BNPL is a good example. A bank-led BNPL proposition cannot sit apart from the rest of the payment stack. It needs to connect customer identity, credit limits, card authorisation, repayment schedules, merchant rules, and fraud checks. BPC’s BNPL solution positions instalments as an embedded capability across online, in-app, POS, wallet, and post-purchase journeys, supported by configurable limits and repayment rules.

Banks cannot move quickly if every proposition depends on disconnected systems. They need modular platforms that can bring all services into one connected environment. They need to modernise.

Modernisation does not have to be disruptive

One of the most persistent myths in payments modernisation is that change must be disruptive. In practice, there are several ways to modernise depending on the bank’s business priorities. In its new guide, BPC outlines approaches suitable for every financial institution's style and risk appetite, pointing out the role of APIs and low-code or no-code integration in helping banks connect third-party systems and manage transition without forcing unnecessary disruption.

Consider the following examples. In Lithuania, Artea Bank moved to a cloud-native SaaS issuing platform to support Mastercard debit and credit products, Apple Pay and Google Pay tokenisation, and advanced fraud management. In Bulgaria, tbi bank completed a full BGN-to-EUR card ecosystem migration across all its accounts, launching a modern BNPL proposition. In Romania, Banca Transilvania replaced legacy card management and processing systems to improve scalability and support loyalty programme development.

What banks should do next

European banks do not need another isolated payments project but a clear view of which issuing capabilities will matter over the next decade. The next step for traditional banking is to assess whether its current infrastructure can support modern capabilities at speed. If the answer is no, modernisation should move from the backlog to the current agenda.

Banks that act now will be better placed to launch faster, protect customers more effectively, and compete with digital-first fintechs. Those that delay may still issue cards, but they will issue them from systems built for a market that no longer exists.

About the author

Julian Farley is an expert in the payments industry with nearly 25 years’ experience across solutions consulting, sales, and business development. As Sales Director for the UK and EU at BPC, he advances the company’s regional growth and equips financial institutions with tools to innovate in issuing, acquiring, fraud, and digital banking, working closely with leaders across Eastern and Western Europe. Driven by a passion for customer-centric innovation, he aims to accelerate payments technology adoption accross the region to provide secure, modern banking experience for all.

 

About the company

BPC is a proven industry leader that is shaping the world of transactions with quick, safe and easy payment processing. With a focus on exceptional technology development and customer service, BPC helps financial institutions and businesses to deliver innovative and best-in-class proven solutions that fit with today’s consumer lifestyle when banking, shopping, or moving in both urban and rural areas. With more than 500 customers across 140 countries, BPC collaborates with all ecosystem players to deliver services for the digital world. Its core product SmartVista suite comprises cutting-edge banking, commerce, and mobility platforms that enable innovative solutions for digital banking, ATM and switching, payments processing, card, and fraud management, financial inclusion, merchant portals, transport, and smart cities. To find out more about how BPC can help businesses deliver a seamless payments processing experience to consumers, please visit www.bpcbt.com