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. Prime placement for the Simon Credit Card
Malls aren’t dead! And they make for interesting marketing moments. Check out this GIANT ROTATING DIGITAL CREDIT CARD AD for the Simon American Express Credit Card dominating the atrium in Fashion Centre at Pentagon City.
- Target: Simon Mall shoppers! (200+ shopping malls in the US)
- 5% cash back on every store in the mall (if you use the card 5 times)
- 10% back on Gift Cards
- 1% back everywhere else
- No annual fee, late fee or foreign transaction fee
💡Minimizing friction:
- Mall resurgence. Despite challenges faced by malls in the digital age, they have seen a resurgence in popularity as physical retail has rebounded from the pandemic. According to Mintel, 61% of consumers enjoy the experience of shopping at a mall or outlet, with this figure rising to three-quarters among young adults aged 18-34. Simon claims over 2 billion annual visits!
- Make it a no-brainer. According to Simon, the average number of visits per month to its malls is 4.1, with visitors staying 85 mins. The average income is $95K+ and the median age is 46. With no fees, the value prop of this card makes it a no-brainer for frequent visitors. It’s not trying to be top of wallet by capturing spend outside the mall (although there is some friction as you have to use it 5 times per month to get the rewards).
- Make it seamless. It would be difficult to miss this giant ad proclaiming 5% cash back and the message to “tap into your best life.” The “text to apply” means applicants can apply seamlessly on their mobile phones, and once approved, can add the card to their mobile wallets to use immediately.
2. Apple Card promotes a “travel diary” for your expenses
Apple Card is promoting its ability to get a snapshot of your transactions by LOCATION as a great way for existing cardholders to track travel expenses.
Cardholders can open Apple Wallet, tap Apple Card and then search where they traveled to see their transactions for that location. They can also search by category, merchant, date and transaction amount by week, month or year.
The built-in travel diary was included in an email to existing Apple Card customers promoting Apple Card features as part of the travel journey, including Daily Cash and no foreign transaction fees.
💡Focusing on the experience:
- Unique positioning. Getting down to this level of detail isn’t unique, but the positioning is. Apple Card is trying different approaches with the positioning of this feature. Earlier in the year it launched an ad campaign that positioned it as a benefit to “find a purchase fast in case you need to buy it again.” Now it’s being positioned as a “built-in travel diary for your expenses.” The level of detail is clearly impressive and finding what resonates with consumers is the key.
- It’s all about the experience. As I always say with Apple Card, it’s all about the experience and less about the rewards. This is another touchpoint that encourages cardholders to engage with the card in Apple Wallet and Wallet is the real differentiator here. I checked my Amex card and I can search by location in the Amex App, but not in Apple Wallet. Apple owns Wallet thereby limiting functionality for other cards, while creating a great experience for Apple Card.
3. Venture X gains traction
On the Capital One Q3 2024 earnings call, Chairman and CEO Rich Fairbank outlined what he believes it will take to “win at the top of the market” with Venture X (launched 2021) and Venture X for Business (launched 2023).
- Sustained and comprehensive effort: “Winning at the top of the market requires a sustained and comprehensive effort to create experiences and access to things that are unique and something to tell your friends about. Lounges, digital experiences and rewards” – In other words, it’s not simply about launching a new product with premium features.
- Brand credibility: “A very important component is building the brand credibility to be viewed as a premium player in that part of the marketplace” – In other words, it’s a long-term play that requires substantial investment.
💡Winning in premium cards:
- Marketing push. Capital One continues to invest in marketing, spending $1.1 billion in Q3 2024, up 15% from last year. For Venture X that means a broad omnichannel marketing strategy with a big emphasis on TV (compared to Amex Platinum and Chase Sapphire Reserve) as it seeks to build brand credibility at the top of the market. There will continue to be a big marketing focus on these flagship premium products as we head into 2025.
- Getting traction. Capital One continues to invest in the experiences and access needed to compete in this ultra-competitive segment and confirmed that when it comes to ROI, Venture X is gaining traction. The increased focus on higher spend segments via Venture X is driving faster purchase volume growth rates for the business. It sounds like Capital One is in it for the long haul.
4. Fidelity adds $100 Global Entry/TSA PreCheck credit on no-fee card
Is the TSA PreCheck/Global Entry credit becoming standard for NO-FEE credit cards?
Fidelity Investments recently emailed Fidelity Rewards Visa Signature Credit Card customers about a new benefit, where they will receive 10K points (worth $100) every 4 years when they apply for Global Entry or TSA PreCheck.
The card has no annual fee and is issued by Elan Financial Services (a subsidiary of U.S. Bank).
Notably, U.S. Bank recently dropped the annual fee for its Altitude Connect Visa Signature Credit Card, but kept the $100 statement credit benefit for customers who apply for Global Entry or TSA PreCheck.
Source: Comperemedia ePerformance [10/01/2024 – 10/31/2024] as of 11/04/2024
💡Is this the start of a trend?
- U.S. Bank has found a way. Only two instances, and both from the same bank with Visa Signature cards. Has it become a Visa benefit? I haven’t seen it listed on the Visa website, but it would align with the other Visa benefits. US Bank/Elan has found a way to include this $100 benefit on a no-fee card. I have more questions than answers, but, regardless, we could be seeing the start of a new trend.
- Value prop escalation. This is another example of value prop escalation across different segments of the market and particularly in the travel card space, where banks have to find new ways to stand out. Incorporating this credit on a fee-based travel card is not the differentiator it once was.
5. Hypercard launches the first consumer card for employees
Hypercard has now officially entered the market with a unique value proposition of being “the first consumer credit card that companies can offer to their employees” in partnership with American Express, Deserve and Celtic Bank.
- For companies: Hypercard offers a streamlined approach to accounting and claims to reduce business spend, consolidate vendor costs and encourage “employee unity.”
- For employees: Hypercard is a no-annual-fee metal credit card with an APR of 28.99% – 31.99% that earns rewards, gives instant access to expense reimbursements and easy access to company benefits like TSA PreCheck.
💡Onto something:
- Backed by Sam. The card is backed by OpenAI CEO Sam Altman. If one of Time Magazine’s most influential people is backing your product, you should shout it from the rooftops, and they are with Altman’s face and quote front and center on the slick-looking website.
- Onto something, but what? Consolidating workplace perks in one place and getting instant expense reimbursements are benefits that employees will value. On the other hand, do employees really want “one product to rule them all” by combining business and personal expenses? Personally, these are expenses I want to keep separate, and with value props on consumer cards so strong, it will be a challenge to convince consumers otherwise.
- Unpacking the unity pitch. A key message is that this will be “inclusive and accessible” with company branding to make employees “feel proud.” The statement that the card is “available to all of your employees regardless of credit” is a message I’ve never seen before that could lead to unintended/negative consequences and the high APR suggests a high-risk customer.
- Messaging. Companies are the target, but employees also need to be convinced if they are going to use Hypercard for personal spending. The launch video hints at an aspirational vision of the benefits of Amex-style “membership,” and bringing that to life will be the challenge.
