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. Amex leads with a “two cards” message in direct mail
American Express has long touted the benefits of “pairing” its cards to maximize the benefits. In a new campaign to existing customers, the “two cards can be better than one” message is taking the lead in email (client-link only) and now in direct mail.
Some existing Amex card members received the direct mail offer below in December promoting the Amex Blue Cash Preferred Card and leading with the two-card message.
Value prop:
- $300 statement credit for spending $3K in 6 months
- 6% cash back at supermarkets (up to $6K) and streaming
- 3% cash back at gas stations and transit
- $84 Disney Bundle Credit
- Option to redeem at Amazon checkout
- $95 annual fee ($0 first year)
- 0% intro APR for 12 months for purchases and BTs
- APR: 18.49%-29.49%
💡Dual card moment:
- Maximizing the growth opportunity. Amex adds approximately 3 million new cardmembers every quarter with many of those new cardmembers opting for Amex’s flagship Platinum and Gold travel-focused cards. Amex has long been trying to find a way to maximize its existing relationships and it’s a smart bet that some of the many millions of existing cardmembers will be interested in pairing a travel-focused card with Blue Cash Preferred to get more cash back at the supermarket as we head into the holidays.
- Indicator of a changing market. Increased competition has caused the card market to become increasingly fragmented with strong value propositions for cards focused on different spending behaviors, interests, and needs. As focused value propositions become more appealing, the dual card opportunity arises to plug the gap in consumer needs. Affiliate sites like NerdWallet and The Points Guy have published articles with headlines such as “the best credit card combinations” and it’s time for card issuers to lean into the strategy.
2. Apple Pay adds “pay with installments” options
iPhone owners who update to iOS 18 can now “pay with installments” with Affirm (added September) AND/OR Klarna (added October).
Apple discontinued Apple Pay Later in June and moved to a global partner strategy establishing relationships with Klarna and Monzo in the UK. Who wants to join this list in the US? Afterpay? Zip? Sezzle?
In reviewing the list of partners, it’s notable to see that there is still only ONE company listed in the “pay with rewards” category. Discover initially launched the feature in 2017 but has updated it for the 2024 release of iOS 18. When it comes to paying with rewards on Apple Pay, Discover rules the roost.
So what are we seeing? Emails. Lots and lots of emails (client-link only) by Affirm, Klarna and Discover promoting their Apple partnership to existing customers.
💡Apple Pay wars?
- Unchartered territory. Apple Pay is surging, particularly among younger consumers who are more likely to own an iPhone and with BNPL heavily skewed towards a younger demographic, there is obvious alignment. It’s still unchartered territory and the growth opportunities for both Apple and its “pay with installments” partners are significant given the growing consumer preference for mobile payments and the growing interest in BNPL.
- The battle to be top of Apple Wallet intensifies. The more partners that Apple allows into its ecosystem, the more those partners have to battle it out to be the top choice when using Apple Pay. Already we are seeing millions of emails being sent to the customers of Affirm, Klarna, and Discover promoting their competitive advantage. This is an area that card issuers need to pay attention to to make sure their cards are the default card for Apple Pay when consumers are being presented not only with more options but more FLEXIBLE options.
3. American Airlines picks Citi as sole co-brand partner
I’m not the only one reading between the lines of yesterday’s announcement from American Airlines regarding the extension and expansion of its relationship with Citi.
- For cardmembers: “This expanded partnership will unlock even more value and exciting new benefits for all of our customers in the future.”
- On acquiring the Barclaycard portfolio: “The attractive cardmember base, size and strength of the combined portfolio are poised to help accelerate growth for Citi’s Branded Cards business and overarching U.S. Personal Banking business.”
- On loyalty: “…designed to drive incremental value for both companies and produce a significantly expanded loyalty and rewards offering for AAdvantage members and Citi-branded cardmembers.”
💡What could this mean? Connecting the dots:
- Enhanced value = higher fees. Citi and American will surely follow the successful Amex Product Design Playbook by strengthening value propositions and then pricing accordingly. The recently updated Amex/Delta fee structure is completely out of line (as in much higher) vs. what we currently see from Citi/American.
- Innovative loyalty alignment. The alignment between Citi’s loyalty program and AAdvantage offers a strong competitive edge for the likely expanding Citi Strata credit card lineup. A 1:1 points transfer is a clear win and could pave the way for a premium Strata card with access to Admiral Lounges. As Amex, Capital One, and Chase grow their lounge networks, this positions Citi to compete effectively while it develops its own Strata Lounges, trademarked in November.
- Marketing push. Update emails have been hitting the inboxes of AAdvantage loyalty members. Citi will have access to Barclaycard’s airside channels and once the portfolio is transitioned in 2026 will cross-sell other products to these new customers. New value props means new card launches and campaigns in an increasingly competitive environment!
4. Hard Rock launches a new credit card with Bread Financial
Hard Rock International and Bread Financial have launched the Unity by Hard Rock Mastercrad Credit Card. The first co-brand credit card for the more than 50-year-old iconic brand that was acquired by the Seminole Tribe of Florida in 2007 and now operates 313 locations in 74 countries.
Target: US members of Hard Rock’s Unity loyalty program
- No annual fee
- 5X points Hard Rock non-casino properties
- 4X points on non-gaming spend at Hard Rock Casino properties
- 2X points at restaurants and grocery stores
- 1X points elsewhere
- Tier Perks: Either a bump up or 3K in Tier Credits depending on your tier
- Earn 10K ($100) points for spending $1K in 90 days
- Earn 5K ($50) points for spending $5K per year
- APR: 19.24% – 33.24%
💡Anticipating the rollout:
- The loyalty playbook. First the loyalty program, then the card. In May, Hard Rock launched Unity by Hard Rock, a loyalty program that rewards members for spending at its hotels, casinos, Rock Shops, live performance venues, and cafes. It’s the loyalty playbook but this is quick and Hard Rock hasn’t given it much time to build up its membership base suggesting a big part of the marketing push will be on-property where there is no time to waste!
- Iconic brand (downplayed) and iconic brand ambassadors. When the Unity loyalty program was launched there was clearly a decision made to downplay the rock ‘n’ roll/iconic guitar heritage and be more inclusive of a broader travel and entertainment consumer and the launch campaign featured global stars including Messi, Shakira, John Legend and Noah Kahan who each appeared in the launch ad. It will be fascinating to see how Hard Rock and Bread Financial can leverage these amazing global brand ambassadors to promote the new card.
5. Alaska Airlines announces a new premium credit card
Alaska Airlines has announced a new premium credit card coming in 2025 as part of “Alaska Accelerate” – its three-year strategic plan to deliver $1 billion in incremental profit following the acquisition of Hawaiian Airlines.
The company has launched an “early access list” where applicants can earn 500 miles for registering plus 5000 miles if approved (in addition to other new account bonus offers, which imply a sign-on bonus at launch).
What we know:
- Global Companion Award Certificate
- 3X miles on foreign purchases and dining
- Waived award ticket and same-day fees
- Lounge passes
- WiFi vouchers
- Accelerated path to status
- An “innovative travel disruption program”
- Includes “unique currency flexibility”
- Some sites report a $395 annual fee (not verified)
💡Anticipating the value proposition:
- Flying with the big jets. The combined Alaska/Hawaiian is the 5th largest US airline and it needs a credit card product suite to match its ambitions. Both Alaska and Hawaiian offer two cards (one personal and one business). For comparison, United, Delta, and American offer six or more to provide a range of loyalty access points and tailored value for different segments.
- The race to capture premium spend. Consumers are increasingly willing to pay more for perceived value – the percentage of cardholders who say they are willing to pay a higher annual fee for better rewards has increased yearly and now stands at 44%. Alaska is launching a premium travel card when the segment is more competitive than ever with new premium products from banks and other airlines launched or announced. That means a really strong offering will be required to stand out in the market (see next point).
- Addressing travel pain points. We will learn more about the value prop and positioning of this card in due course but there are signs – with references to benefits like a travel disruption program, fee waivers, and currency flexibility – that Alaska is looking to address specific pain points in the travel journey for the most frequent fliers to create a point of difference in addition to its famous Companion Certificate.
