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. Interview with Jinal Shah: US CMO of Zip
The buy now, pay later industry is booming, and Jinal Shah of Zip is at the forefront of its evolution. I had the pleasure of discussing the industry’s trajectory and Zip’s growth strategy with Jinal in the latest episode of the Mintel Little Conversation podcast.
We delved into Zip’s innovative partnerships with NASCAR and the WNBA’s Kelsey Plum, and Jinal shared invaluable career advice for aspiring marketers.
💡Writing the future of buy now, pay later:
- Thriving. There was some speculation that buy now pay later was a bit of a fad but 1 in 5 consumers said they planned to use it in 2024, jumping to 1 in 3 for Millennials. With BNPL not just surviving, but thriving in the post-COVID credit environment, and the CFPB stepping in with regulatory oversight, the industry is maturing and solidifying its place in the credit landscape.
- Pioneering. Zip has been there from the start and is poised to lead the industry into its next growth phase. The pioneering spirit is evident and with a laser focus on meeting customer needs the company is determined to capitalize on what it sees as a massive $11 trillion market opportunity to be “the first payment choice everywhere and everyday.”
2. Targeted Best Western offers hit consumer mailboxes
Last month, I posted about the launch of two new co-branded credit cards from Best Western Hotels and Resorts after it established a new partnership with Mercury Financial.
Pre-screened direct mail offers for the new cards have been hitting consumer mailboxes in October and November, giving us a view into the strategy you won’t see when reviewing the card details online.
Offers for the no-fee Best Western Rewards Visa Signature Card (as opposed to the $89 annual fee premium version of the card) highlight the following features:
- Credit line FROM $4,000
- 10K bonus points ($50 towards free nights) after spending $500 in 90 days
- Automatic Gold Elite Status
- 4X points on Best Western
- 2X points everywhere else
- No annual fee
- 29.99% APR
💡Credit adventurers:
- Moving target. It has always puzzled me why more issuers don’t promote the credit line in their marketing, particularly when targeting consumers with average/below-average credit scores. For what would be considered an average credit line, promoting a minimum of $4K suggests that the offer is targeting below-average credit consumers who have established some credit history and are now looking to continue their credit journey by taking the next step.
- Combining the credit journey with the travel journey. Mercury is known for targeting nearprime/subprime consumers and leveraging credit lines from $2,500-$5,000 in marketing. When Mercury partnered with Spirit Airlines in 2021, it was the first time we had seen a credit/travel journey approach to marketing an airline co-brand card and we have now seen them extend that approach to hotels. Travel remains a huge opportunity, and co-brand partners are seeking new ways to make their credit cards more accessible to a broader population of loyalty program members.
3. The new Mesa Homeowners Card
New card alert! Mesa (established in 2023) has announced the launch of the Mesa Homeowners Card, in partnership with Visa and Celtic Bank, to allow homeowners to earn points on their mortgage payments.
The card is waitlist only, and to join the waitlist, you have to download the app.
Details on the card are limited, but here is the basic value prop:
- 1X points on monthly mortgage payments — linked through the Mesa app
- 2X points on grocery, gas, and EV charging
- 3X points on home-related purchases
- 1X points elsewhere
- Claims over $800 in value and no annual fee
💡Cracking the code on mortgage payment:
- Race to the moon. Despite the decline in affordability, as of early 2024, 67% of American consumers own their residence and for those with a mortgage, it will likely be their largest monthly expense – making this a huge opportunity for anyone who is able to crack the code for credit cards.
- Not just a card. Mesa claims to be “creating the homeowner membership category” by offering a loyalty program and a mortgage marketplace where you can earn Mesa Points on refinancing and redeem them for travel or gift cards. It’s a similar approach to Bilt Rewards and that’s no coincidence given that a) Bilt is probably the most successful fintech card launch in recent years and b) Mesa staffers come from Bilt and other fintech credit card startups.
- How does it work? Mesa requires you to link your bank account to earn points for mortgage payments but it’s not yet apparent how it will work. There has been a race to crack this element of payments for some time but the only in-market offering we have seen is a test from Aven for its Home Card that offered 1% back on mortgage payments through a partnership with Plaid. In that case, it didn’t seem like the payment was actually being made with the card but that mortgage payments paid through the bank were verified with Plaid for what was really a cash back bonus. We will see how Mesa approaches it.
4. Credit card travel booking portals start to resonate
It’s relatively early days for new-style credit card travel booking portals, but 14% of consumers surveyed earlier this year who took a trip in the last 12 months said they booked via their credit card issuer’s travel site, e.g., Amex Travel, Chase Travel, Capital One Travel, Citi Travel, etc.
That number jumps to 1 in 4 for Millennials who own a bank-branded travel credit card, according to a Mintel Report on Travel Booking.
💡Moving the needle
- Gaining traction. Most consumers book directly with airlines/hotels but 14% is not nothing and shows there is traction being gained with the reinvention of sites from Chase, Capital One and Citi that are now being marketed aggressively to get some ROI. Booking through your credit card travel site isn’t a new idea but sites are being updated and improved to become central to the value propositions of leading bank-branded travel credit cards.
- Travel site escalation. Having a travel site is increasingly becoming table stakes as online travel agencies establish new partnerships and even fintechs like SoFi, Aven and Robinhood have incorporated travel booking sites into the value propositions of their cards. The next level of escalation will be to call out site features like load time, flight costs or the overall experience and NerdWallet has already written an article making these comparisons. I predict we could see messages in travel credit card marketing like “The fastest site,” “The cheapest site,” “The best site according to XXXX.” That’s the direction we are heading.
5. Elevations CU launches the first NIL credit card
Elevations CU launches the first NIL credit card
- Target: Colarado Buffaloes fans (CU Boulder has nearly 40K students and more than 300K alumni)
- $150 bonus when you spend $2K in 90 days
- Free popcorn at football and basketball games!
- 3% cash back on CU including merch from Fanatics.com, Buffs Team Store, CU Book Store, ticket sales and concessions
- 3% cash back on donations to the 5430 Alliance (NIL collective) and CU Buff Club (supports student-athletes)
- 2% cash back on gas, streaming, phone, cable, and restaurants
- 0% intro APR on balance transfers for 12 months
- 19.49% – 21:00% APR
- $49 annual fee (donated to NIL)
💡A new frontier in college credit card marketing:
- Changing landscape. The US Supreme Court ruling in NCAA v. Alston in June 2021 allowed student-athletes to receive NIL compensation, fundamentally changing the landscape of college sports and resulting in an explosion of new marketing opportunities. As far as I know, this is the first time we have seen NIL baked into the value prop of a credit card, strengthening the bond between fans, the university and its athletic programs. The card launch signals a new frontier in college credit card marketing.
- Marketing to students. Credit card marketing on college campuses has been restricted since the CARD Act of 2009 so Elevations Credit Union will need to raise awareness through social and digital channels to reach its audience. The act did not explicitly address card marketing at stadiums, and it will be interesting to see if the card is marketed at Folsom Stadium in some way. It’s that alumni base that looks the most attractive, and if you are a CU alum, I’m sure you will be receiving a card offer in your inbox/mailbox sometime soon!he challenge.
