Lightbulb Moments: Spark Your Strategy (Vol.14)

Lightbulb Moments: Spark Your Strategy (Vol.14)

Published: July 17, 2024
8 minutes read

Comperemedia’s Chief Insights Officer, Andrew Davidson is well known for sharing the latest insights on financial services products and marketing strategies/innovations on his LinkedIn, as an event speaker and as a host on Mintel’s Little Conversation podcast. In this bi-weekly recap, he will provide you with the latest news and insights happening in the financial services industry.

Here are the 5 things you need to know:

1. A surprising new travel credit card from Imprint

New card alert! This one is a surprising new entrant coming in left field from Turkish Airlines and Imprint (First Electronic Bank issues the card). It’s the new Turkish Airlines Miles&Smiles Premier Visa Signature Card now available in the US.

  • 40K Bonus Miles for spending $3K in 90 days which “could equal a free flight from the US to Istanbul.”
  • 3X miles on purchases with Turkish Airlines
  • 2X miles on dining/groceries/entertainment/lodging
  • $99 annual fee
  • APR: 19.74%-33.24%
  • No foreign transaction fees
  • Limited edition metal card for the first 5,000 cardholders
Source: Imprint on X

Locking into the travel opportunity:

  • Credit card as a service (CCaaS) competition heats up in the airline co-brand space. Recently, Cardless has been getting all of the headlines after it ditched basketball and pivoted to airline co-brand cards. It has launched a series of new cards this year with Qatar Airways and Avianca,  bringing its total number of live credit card products to eight of which seven are co-branded airline cards. Imprint is following the lead of Cardless with its first foray into airlines although it does have two travel cards on the market – Westgate Resorts and Holiday Inn Club Vacations – so that makes three travel cards out six cards in total. These companies have found a way to make the economics of credit cards work for smaller portfolios and bring them to market at speed. With a resurgent travel industry, they have locked in to the travel credit card opportunity.
  • Did you know? Turkish Airways flies from Istanbul to 14 destinations in the US and is targeting 20. The airline has been growing rapidly and has doubled capacity since the pandemic with 32.8 million flying in the first 5 months of 2024. I was surprised to read that Istanbul surpassed London Heathrow as Europe’s busiest airport in 2023. Sounds like quite a catch for Imprint!

2. Upgrade sends consumers to Credit Karma for MyFive Cash Rewards card

Affiliate marketing still plays a big role when it comes to credit card acquisition with affiliate sites like Credit Karma sourcing potential card applicants in exchange for a fee. That’s why I was surprised to see a series of posts by Upgrade on Facebook and Instagram directing consumers interested in the Upgrade MyFive Cash Rewards card to Credit Karma rather than directing them to apply at Upgrade’s website.

The MyFive Cash Rewards card is the latest iteration of the Upgrade Card. First launched in 2019, the Upgrade Card is a hybrid product that combines a credit card with an installment loan (there is no grace period).

MyFive Cash Rewards earns 5% cash back on up to $3K of quarterly purchases “in the category of your choice” and 1% on everything else.

Source: Comperemedia Omni [06/01/2024 – 06/30/2024] as of 7/16/2024

Drive to Karma:

  • Why do this? One can only speculate. Could it be to drive traffic to Credit Karma to kickstart the campaign, test out the application experience and hopefully pick up more than the single one-star review it has so far? The card isn’t listed on Upgrade’s site (although you can access an application page directly if you search) so could it infer some kind of Credit Karma exclusive? Does Credit Karma bring an additional element of trust that makes a difference? These are owned posts and the brand doesn’t have many followers, so my bet is that it’s all about getting a few consumers to visit Credit Karma to kick-start the campaign. It will be interesting to see what Upgrade does next to promote its MyFive Cash Rewards card.
  • Iterative innovation. The relentless pace of innovation at Upgrade continues with new iterations of its hybrid product. Upgrade Select, Upgrade Cash Rewards Elite and now MyFive Cash Rewards. The variations keep coming.

3. Seen and Snap Finance partner on an acquisition campaign

Fintech partners in acquisition! Interesting collaboration between Snap Finance and Seen to offer customers of Snap a NEW Seen Mastercard credit card with a credit limit of up to $1,000.

Snap Finance: Launched in 2012. Offers lease-to-own and installment financing options focusing on “furniture, mattresses, tires and wheels, appliances, electronics, and other durable goods.”

Seen Mastercard: Launched 7 months ago (issued by Coastal Community Bank). A credit building/re-building credit card with an APR of 29.99% or 35.99% and an annual fee ranging from $39-$75.

Source: Comperemedia Direct [06/01/2024 – 06/30/2024] as of 7/16/2024

Co-branded offer but not a co-branded card:

These are the first offers we have captured from Seen and it is a unique collaboration where there is clearly overlap with Snap’s target audience. Seen gets access to a pipeline of potential customers while Snap gets to provide some additional value and help its customers build credit. Credit building has been one of the most innovative areas of financial services in recent years and as new companies flood the space there will be more opportunities for these types of win-win partnerships.

4. Navigating communications during the Evolve cybersecurity incident

Fintech under the cosh. Hot on the heels following the collapse of Synapse, some big-name fintechs are having to deal with a cybersecurity incident at fintech bank Evolve Bank & Trust.

What happened?

  • In May, there was ransomware attack on Evolve Bank & Trust by the criminal organization LockBit.
  • Customer data was leaked after Evolve refused to pay the ransom.
  • Evolve is the bank behind a number of fintechs including Affirm, Mercury, Bond and Earnin

Notably, fintechs Dave, Branch and Affirm were among those who moved quickly to communicate to customers letting them know about the incident, enhancing their security (Dave) or promising to investigate (BranchAffirm).

Base: Mintel ePerformance [06/01/2024 – 06/30/2024] as of 7/16/2024

Transparency and communication are critical:

  • Feeling the pressure. Data breaches happen but US consumers generally trust legacy financial institutions more than fintechs and this incident doesn’t help to overcome one of the biggest barriers to fintech adoption. It also comes following the recent collapse of Synapse, when consumers found out that they had been misled to believe that their accounts (many held at Yotta) were FDIC-insured when they weren’t. Fintechs that became banks like LendingClub and Varo Bank had to jump through additional hoops but that extra work is being validated as the hits keep coming. Startups will have to work even harder to establish consumer trust if they want to break through.
  • Not hanging around. Evolve didn’t even start notifying customers until July even though the breach was found in late May (the company posted details on its website on July 9) But Dave, Branch and Affirm decided to waste no time by communicating early even though they didn’t have all of the information. Affirm even posted its communication on X. Transparency and communication are critical during times of uncertainty.

5. Chase and Marriott launch enhanced Bonvoy Bold Credit Card

New benefit alert! Chase and Marriott have launched an enhanced version of the Marriott Bonvoy Bold Credit Card (the no-fee version of the Bonvoy card) and the announcement leads with a NEW benefit: Travel Now, Pay Later.

Travel Now, Pay Later: Cardmembers can break up travel purchases into equal monthly payments, with no interest and NO PLAN FEES for purchases between $100 to $5,000 made directly with an airline or at hotels participating in Marriott Bonvoy.

Other new benefits:

  • 2X points on grocery, rideshare, select streaming, select food delivery, internet, cable and phone.
  • Automatic Silver Elite Status
Source: Chase.com

Playing offense and defense:

  • Similar but different. My Chase Plan was launched in 2020 to enable cardmembers to set up payment plans from 3-24 months and was subsequently rebranded as Chase Pay Over Time. Travel Now, Pay Later takes that branding one step further to make it a relevant benefit for the travel sector. The difference here is that the new Travel Now, Pay Later benefit for Bonvoy Bold has no plan fees for purchases at Marriott hotels or directly with airlines. Other purchases incur the usual monthly Chase Pay Over Time plan fee of 1.72%. Is Marriott picking up some of the tab or is this a co-brand partner value-add from Chase?
  • Financing takes center stage. It’s notable to see this new financing benefit take center stage in a travel card offer, placed right up there alongside the other new benefits of 2X points on grocery/rideshare/streaming and automatic Silver Elite status. BNPL continues to grow with one in fiver consumers saying they plan to use it to make purchases and travel is somewhat unchartered territory. By launching this new feature Chase can take advantage of the opportunity and counter competition from fintechs like Upgrade whose travel-focused Uplift brand already offers “travel now, pay later” with Southwest, another Chase co-brand card partner.
Andrew Davidson headshot
Andrew Davidson

Andrew Davidson is SVP, Chief Insights Officer for Comperemedia, an expert in consumer and marketing intelligence.

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