From Start-up to Acquisition: Servicer for a Large Credit Card Portfolio

  • Client type

    De novo credit card issuer, later acquired by a major financial services company

  • Portfolio size

    De novo that grew to over 1.5 million accounts

  • Our goal

    Enable a newly founded credit card issuer to scale rapidly, then support its transition through acquisition

Overview

In 2016, an experienced credit card management team founded a new credit card issuer and developed a new card product to target underserved populations.

CardWorks Servicing’s expertise and state-of-the-art servicing infrastructure enabled the issuer to focus its capital and management talent on risk selection, marketing, and compliance, which significantly reduced the time necessary for a new issuer to scale a credit card business.

The Challenge

  • Provide the servicing infrastructure to enable a de novo issuer to focus on risk selection, marketing, and compliance
  • Significantly reduce the time necessary for a new issuer to scale a credit card business
  • Support the issuer’s growth when its acquisition by a major financial services company became a possibility
  • Maintain continuity of servicing through and after the acquisition
  • Scale servicing infrastructure to meet the rapid growth of the portfolio

Our Solution

As the relationship matured, our role expanded well beyond day-to-day servicing.

  1. 01

    Turnkey solution for a De Novo issuer

    Provided servicing infrastructure and expertise so the issuer could focus capital and management talent on risk selection, marketing, and compliance.

  2. 02

    Accelerated scaling

    From start up to a rapidly growing, mature portfolio, our ability to scale enabled our client to meet and exceed their projections.

  3. 03

    M&A facilitation

    As the business grew and our relationship with the acquiring company deepened, we helped initiate purchase discussions.

  4. 04

    Continued servicing post-acquisition

    After diligence, the acquirer of the portfolio chose CardWorks Servicing to remain as the servicing solution.

  5. 05

    Acquisition of the business

    When the acquiring company decided to focus on its core lending platform and sell the card business, we executed a purchase agreement for the entire business.

The results

That trajectory culminated in our ownership of the business.

  • A de novo issuer grew to over 1.5 million accounts by partnering with CardWorks Servicing
  • In December 2021, the business was acquired at a valuation of $750 million — a significant acquisition premium
  • After rebranding, the business continued to grow with CardWorks Servicing as primary servicer
  • On January 22, 2025, CardWorks Financial Group executed a purchase agreement for the entire business