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. Bilt launches points on home purchases
Bilt Rewards, the loyalty program for renters, has joined forces with eXp Realty, the world’s largest independent real estate company with 85K agents, in a creative new partnership – even the New York Post got excited! (there are a lot of renters in NYC).
- Bilt members can now earn 1 point for every $2 spent on a home purchased through an eXp Realty agent, with the potential to earn hundreds of thousands of points for travel.
- The new “Buy a Home” tool lets Bilt members search for homes based on their monthly budget and shows homes based on all-in monthly costs, including mortgage, taxes, and insurance (unique to Bilt and not available on the eXp site).
💡Pushing loyalty to new heights:
- Creative partnerships. Bilt continues to break new ground in the loyalty business with its creative approach to partnerships. According to the NY Post article, “The real estate company will charge its usual broker fee and pay Bilt a referral cut.” It’s a win-win for Bilt and eXp with the companies both well-matched around a mutual focus on innovation in their respective industries.
- Turning skepticism into optimism. Current attitudes toward home buying among renters in the US reflect significant challenges and skepticism. According to Mintel, half of current non-owners doubt they will ever be able to afford to own their own home, and nearly two-thirds of those who feel financially stuck in their current residence are skeptical about achieving homeownership in their lifetime. Bilt is focused on making home buying more accessible, which seems noble given the irony that when aspiring renters achieve their goal of homeownership, they will no longer need the Bilt Rewards Mastercard but I’m sure Bilt is working on something to keep their customers in the long term. A partnership with the recently launched Mesa Homeowners Card would be a nice fit (see Lightbulb Moments Vol 23)!
2. Rumors surface that Ally Financial is selling its cards business
“Ally Financial weighs sale of credit card business” – I was surprised to see this headline surface late on a Friday evening in credible media outlets such as American Banker and Bloomberg News.
Sources suggest Ally is looking for a buyer for its card unit, which it has been building since acquiring the sub/near-prime portfolio of Fair Square Financial in 2021.
Based on its most recent earnings statement, Ally indicated an average of $2.1 billion in credit card loans near the end of the third quarter.
Ally has been growing its card business while also trying to build deeper relationships with cardholders by offering them the opportunity to open an Ally Bank Savings Account.
💡Signals:
There were signals in 2023 when Ally decided to take a more cautious approach in the face of increasing charge-offs by tightening credit and shifting to Prime. “While we have moderated our growth ambitions in the near term, we continue to view card as a key part of our long-term strategy and financial profile.” was the statement. Other subprime issuers were taking a similar approach and given that Ally was still bedding in the new portfolio, there wasn’t a suggestion of an exit.
- What’s not working? The card business at Ally has continued to grow with now almost 1.3 million cardholders, but Ally has 11 million customers and the idea was always to unlock the potential synergies of a diversified financial services company with credit cards the missing piece of the puzzle. It’s the synergy that might not have worked out as expected (Ally stopped reporting on “multi-product relationships” at the end of 2023) and with the rate environment shifting, maybe it prompted the idea of a sale.
- Who could buy it? You need the money and an interest in a mostly non-prime portfolio. Here are my contenders in no particular order: Credit One – has the scale and ambition. Bread Financial – looking to diversify with proprietary products. Card Works – would be ironic given that Ally was planning to buy Card Works in 2020 but the deal fell through.
Source: Ally Financial Earnings Presentations
3. Discover’s new Offer Dashboard at Amazon
Just in time for the holidays! Discover Financial Services has launched its NEW Discover Offer Dashboard on Amazon.com.
Emails have been hitting cardholder inboxes in November announcing the new feature and encouraging cardholders to visit their Discover Offer Dashboard before they checkout at Amazon.com to see if they’re eligible for a special offer.
💡Top of wallet and top of mind:
- Is Discover the best card for Amazon? Amazon continues to dominate e-commerce and Discover has arguably been the most proactive card issuer at encouraging its cardholders to make Discover their default for purchases on Amazon. This year Discover has taken it to another level by launching its new Discover Offer Dashboard, making Amazon purchases a 5% cashback category for the quarter, offering cash incentives for making Discover their default payment option, and also allowing cardholders to pay with rewards at checkout.
- The biggest shopping portal in town. Amazon remains the leading online marketplace with more than three-quarters (76%) of online holiday shoppers starting their search on Amazon, according to Mintel. Everyone wants a piece of the retail pie and while we have seen the launches of shopping portals from card issuers like Capital One Shopping and Citi Shop, you can’t beat the biggest shopping portal in town! Discover is making its mark on Amazon, ensuring it stays top of mind for consumers by aligning with their shopping habits and prioritizing their needs throughout the holiday season and beyond.
4. PayPal promotes 5% cash back on tech purchases
I spotted this little beauty towering above Spring Street in Manhattan. It’s a holiday-themed ad for the PayPal Debit Mastercard: “This holiday, get 5% cash back on up to $1,000 spent on the category you choose each month, like tech.”
The ad is the latest iteration of a sweeping multi-channel campaign that we have been tracking at Comperemedia Omni since the launch of PayPal Everywhere in September.
💡Everyone wants a piece of the pie:
- New competition. Everyone wants a piece of the retail pie and competition is manifesting in new ways that are being magnified during the holiday shopping season. In this instance, the competitive threat comes from a DEBIT CARD that many consumers might find more appealing than a credit card now that it offers some cash back. In addition to the category cash back, PayPal offers what it calls “stackable offers” from brands like Best Buy and Adidas that it has been pushing heavily in the run-up to Black Friday (aka “Stack Friday” according to PayPal).
- New tech category. According to PayPal’s T&Cs, eligible cashback categories are Gas, Grocery, Restaurant, Clothing, Health and Beauty, and “other temporary or seasonal Monthly Reward Categories that we may offer from time to time.” It seems that “Tech,” per the focus of the ad, is a new addition or temporary category. Last year, 35% of holiday shoppers purchased electronics, according to Mintel, and it will be interesting to see what happens this year. Best Buy reported weaker sales in its Q3 earnings and is hoping that Black Friday and promotions like PayPal’s will provide a much-needed injection after a two-year sales slump in the consumer electronics category.
5. Eddie Bauer ramps up marketing for its new card
In the lead-up to the holiday season, Eddie Bauer ramped up its marketing for the new Eddie Bauer World Mastercard following the announcement of a new partnership with Imprint and First Electronic Bank in September.
Hundreds of thousands of emails hit the inboxes of Adventure Rewards Program members in November, promoting 15% off on their first online purchase when they open the no-fee credit card with a smaller segment receiving a 25% off promotion.
- 15% off first online purchase + 500 points ($5)3x points at Eddie Bauer
- 2x points on dining and groceries
- 1x points everywhere else
- Free shipping on returns
- No annual fee
- APR: 19.74%-33.24%
💡New card ramp up:
- Quiet expansion. Imprint has been steadily growing since coming on the scene as a co-brand specialist in 2020, with a total of seven cards launched to date, including three in 2024 (Brooks Brothers and Turkish Airlines cards were also launched this year). The angle is speed to market, with Imprint promising to launch cards “in as little as three months” or nine weeks in the case of Holiday Inn Club Vacations (launched 2022)!
- Now on the inside. Following Brooks Brothers, this is the second collaboration with Authentic Brands Group, the owner of Eddie Bauer. As the self-proclaimed “world’s largest sports and entertainment licensing company,” Authentic has a diverse range of brands across various sectors, such as fashion, sports, and entertainment, including many other well-known names like Reebok and Forever 21 and licensing rights to celebrities like Elvis Presley and Marilyn Monroe. Imprint is clearly seeking to unlock the power of the partnership to bring new cards to market and any banks currently working with Authentic should be wary of this new player seeking to disrupt the status quo.
Source: Imprint
