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. Capital One’s limited-time offer for Venture Rewards
In July, Capital One launched a limited-time offer for its Venture Rewards card, which promotes a $250 Capital One Travel credit (you have to book on Capital One Travel to get the credit), in addition to the sign-on bonus of 75K after spending $4K in three months.
The campaign rolled out during the summer using paid social and display advertising and led either with the $250 credit OR combining the credit with the sign-on bonus into an “earn up to $1,000” offer. Either way, it’s presented, it’s a compelling offer and not bad for a card with a $95 annual fee!
The age of travel credits:
- Justifying the fee. Competition in the bank-branded travel card segment is heating up, and premium cards in the $95 annual fee range increasingly rely on travel credits to stay competitive when it comes to justifying their value.
- Travel credit escalation. With this limited-time offer, Capital One just blew away its competition at this price point, suggesting it won’t concede to new threats from other recently launched bank-branded travel cards, and ushering in a new era of travel credit escalation.
2. Bilt launches Automatic Healthcare Savings in partnership with Walgreens
More than one million emails hit Bilt member inboxes in August, introducing them to the Bilt Neighborhood Pharmacy Program – a new partnership with Walgreens.
Members can use ANY credit or debit card linked to Bilt while shopping at Walgreens to get:
- Automatic FSA/HSA savings: Bilt will automatically identify eligible items within 72 hours, and with one-click members can fund those purchases from a Flexible Spending Account (FSA) or Health Savings Account (HSA). An industry first. Super helpful!
- Rewards: Bilt Members earn 1x points on Walgreens purchases, 2x points on Walgreens-branded items, and 100 Bilt points on prescription refills. Nice!
- Photos? Coming soon, Bilt Members will have access to free photo prints at Walgreens. Say what? OK!
Source: Comperemedia ePerformance [08/01/2024 – 09/06/2024] as of 09/07/2024
Solving a pain point and bringing value to customers:
- A solution to a problem. The Automatic Healthcare Savings benefit not only simplifies healthcare spending but also addresses the major concern of unused FSA funds. Bilt was founded on the premise of innovating to solve real consumer problems, as Bilt founder Ankur Jain articulated to me when I interviewed him a few years ago, and this latest benefit is consistent with that ethos.
- Fintechs show the pathway. I often say to big banks that it is worth paying attention to fintech startups, whether they succeed or not, as they are laser-focused on consumer needs and can be early indicators of industry trends. You may recall the innovative Ness Card, led by Derek Flanzraich which didn’t take off, but put the spotlight on wellness and was working on a similar HSA initiative.
- Distribution is the key. In my interview with Ankur, he emphasized how distribution was the key to success even with the greatest innovation, and that’s true. Enter Walgreens, with 9,000 locations serving nearly 9 million customers daily. That sounds like a good platform to build on!
3. U.S. Bank launches Bank Smartly credit card and savings account combo
“The highest level of cashback rewards in the market.”
U.S. Bank has launched (waitlist only) a NEW COMBO credit card and savings account that earns “up to 4%” cash back and 4.10% APY on savings.
The US Bank Smartly Visa Signature Card will earn 2% cash back on purchases, but customers can combine it with the US Bank Smartly Savings Account to earn additional cash back based on deposits held at the bank.
- $5,000 – $49,999 can earn 2.5% total cash back
- $50,000 – $99,999 can earn 3% total cash back
- $100,000 or more can earn 4% total cash back
No other details/pricing are available at the time of posting. Emails began rolling out in September, announcing the waitlist.
Gearing up for growth:
- Challenging the gold standard. Bank of America’s Preferred Rewards program has long been the gold standard when it comes to enterprise loyalty. U.S. Bank, with its self-professed (and likely true) claim to be the “highest level of cashback rewards in the market” is challenging that notion. With a simpler structure, it will look to lead with a message of 4% that will stand out in the market. The move follows the launch of the Smartly Checking Account and Smart Rewards in 2022.
- Expansion. It’s clear from the press announcement that this new product combo is not only for existing US Bank customers. “There has never been a better time to become a U.S. Bank client,” said Arijit Roy, head of consumer and business banking products for U.S. Bank suggesting the new combo product will spearhead a push for new customers.
4. First-ever Alibaba.com Business Edge Credit Card
Cardless continues to push the boundaries, launching (waitlist only) the first ever Alibaba.com Business Edge Credit Card with Mastercard.
Target: Small business owners using Alibaba to source cross-border/domestic purchases.
- 3% cash back OR 60 days interest-free for purchases up to $40K per year
- 2% cash back on business/office services, advertising/marketing, and dining
- 1% cash back on everything else
- 90 day order protection (instead of 30)
- $100 sign-up bonus for spending $3K in 90 days
- $100 in coupons AND $120 in shipping discounts
- First 5,000 applicants receive a metal card
- APR: 19.24% to 35.24%
- $199 annual fee
Source: Comperemedia ePerformance [08/01/2024 – 08/19/2024] as of 08/22/2024
Borrowing from the Amex playbook:
- Similar to Amazon, but different. The headline of this value prop (cash back or payment terms) is very similar to the Amazon Business Card, and that might not be surprising given that Amex is an investor and partner of Cardless. Given their relationship, it is therefore surprising that Mastercard and not Amex is the network partner for this card, but the conflict of interest concerns might have led to the need to keep the two e-commerce giants separate in terms of credit cards.
- Who uses Alibaba? Unlike Amazon, which focuses more on B2C, Alibaba positions itself as the “leading e-commerce platform for global trade” and claims about 40 million active buyers as of 2024. I don’t know how many are in the US, but just based on that, you can reasonably assume a good-sized market for a business credit card.
- Value play: The key difference from Amazon’s offering is the $199 annual fee. Here, Alibaba/Cardless takes a cue from the Amex playbook, highlighting over $1,420 in potential value through cash back, coupons, and shipping discounts to offset the fee. Despite this value message, the fee is substantial, suggesting that small businesses using Alibaba must spend significantly on the platform to justify it.
5. The CBA launches a credit card confidence campaign with influencers
The Consumer Bankers Association has launched a campaign to provide consumers with resources to make informed decisions on choosing a credit card, including a new website and partnerships with TikTok and Instagram influencers to reach young adults.
Three influencers have already posted videos paid for by the CBA encouraging consumers to visit the website to take a three-question Credit Matchmaker Quiz.
- John Liang (@JohnsFinanceTips)
- Bo Petterson (@DadAdviceFromBo)
- Taylor Price (@PricelessTay)
CBA-approved influencers:
- Innovative outreach through influencer partnerships. Who would have thought the CBA and TikTok?!? But what a great strategy to capture the attention of young adults, making it easier for them to engage and understand credit cards when there are so many options to choose from. Trade associations, government agencies, and other industry organizations have to adapt to the shifting media landscape like everyone else.
- Credibility boost. Partnering with a reputable organization like the CBA can significantly boost the credibility of influencers when they make financial recommendations. This could lead to more banks and affiliate sites establishing partnerships with this specific set of CBA-approved influencers.
