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. Xbox Mastercard’s national rollout
The Xbox Mastercard, issued by Barclays, launched nationally after being made available to Xbox Insiders last September so they could “help shape the customer experience.” A post on X (where Xbox has 23M followers) and a takeover of the Xbox website anchored the start of the national rollout.
The pre-launch with Xbox Insiders led to 4 NEW benefits:
- Two 3-month trials for Game Pass Ultimate ($16.99 per month) to give to friends/family, after spending $7K in 12 months
- Upgrade to level 2 of Microsoft Rewards
- 3 months of Spotify Premium
- Access to Barclays Money Basics for financial education
Source: Xbox on X
No niche segment:
- This is what Mintel’s gaming expert Brian Benway had to say about it: “The card is likely to attract college-age gamers, especially those already integrated into the Xbox or Microsoft ecosystem. The perk of being upgraded to Level 2 of Microsoft Rewards could be a significant draw. By making it the default card for recurring charges like Game Pass Ultimate and other digital purchases on Xbox, users can enhance their gaming experience—similar to how Amazon Prime members benefit from using an Amazon card. While its appeal might be limited outside the Xbox/Microsoft fan base, it stands out as an excellent option for enthusiasts.”
- Gaming is a big market. 76% of adults (yes adults) are gamers according to Mintel. If you want something more narrowly defined, but still impressive, how about the rumored 34 million Game Pass subscribers who might be motivated to take the plunge and apply given the value outlined by Benway. Either way, it’s a big opportunity for a relatively underserved segment. I expect a big marketing campaign to match.
2. The outlook for credit is still settling at Capital One
Lower and later tax refunds led to Capital One’s charge-off rate coming in a little higher than expected in Q1 2024.
Despite the so called “tax refund effect” Chairman Rich Fairbank reassured analysts on the recent earnings call that “it hasn’t changed our view that credit has settled out” and charge-offs will settle at 15% above pre-pandemic levels in the near term as the outlook for the consumer remains strong.
FYI, according to Equifax, a charge-off means the lender has written the account off as a loss, and the account is closed to future charges. It may be sold to a debt buyer or transferred to a collection agency.
The mist is still clearing: At a prior earnings call Capital One had referenced “stabilization” multiple times in the context of its outlook for credit. Despite this latest road bump the credit mist is still clearing. I’ve heard the same story from multiple banks. Card marketers will likely ease into less cautious growth strategies as the outlook for credit comes into focus.
3. “Pay as you go” discounted lounge visit fees for business owners
Wells Fargo has quietly launched its NEW Signify Business Cash Card which is now available to new applicants on its site. The Signify suite of cards has been anticipated for a while with rumors that 3 cards would launch in March.
- Signify Business Cash (launched in April)
- Signify Business Essential (?)
- Signify Business Elite (?)
Business Cash is a 2% cash-back card with a $500 sign-on bonus (for spending $5K in 3 months) no annual fee and a 0% intro APR on purchases for 12 months. All 3 cards will have access to Priority Pass but what’s notable is that even the no-fee Business Cash Card includes a Priority Pass membership where business owners can access more than 1300+ airport lounges on a pay-as-you-go basis with discounted visit fees (rumored to be $35 per visit).
Lounge wars continue:
- With business travel on the rise, the lounge wars are intensifying and increasingly crowded lounges are becoming more accessible for less frequent fliers. Last year U.S. Bank added a Priority Pass Digital membership as a benefit when it launched its Business Altitude Connect card, a $95 annual fee card (first year waived) that includes 4 free passes. Wells Fargo has extended access further on its no-fee business card with “pay as you go” enabling it to promote lounge access as a unique feature in its marketing.
- Rollout imminent? The quiet launch of Business Cash suggests the launch of the other Signify Business cards is imminent and while there hasn’t been a big announcement that will almost certainly be coming once the full suite of products is ready to go. Wells Fargo has been converting some legacy business card customers to Business Cash, which might have something to do with making this card available in advance.
- Betting on the Signify brand. Is anyone else struck by the SIZE of the Signify branding on the card design? I can’t think of another bank-branded card where the product brand is quite as prominent as this, suggesting that Wells Fargo will be going all in on the new name in its advertising.
4. Affirm tries something old
Could we see a sandwich-man/woman wearing this soon? Spotted this bit of fintech non-digital signage on an NYC sidewalk outside the Canadian modern furniture store EQ3. It’s Pay Over Time with Affirm offering rates “as low as 0%.”
Fun facts (courtesy of the internet):
- Either freestanding (also known as an A-frame) or carried by a person, the sandwich board was a popular form of advertising in the 19th century (yes, old).
- Men were hired to carry the signs up and down the street (sometimes on horseback) and the rumor is that Charles Dickens was the first to call them “sandwich men” (true or not, it’s a good one…).
Not so digital: The sandwich board is dated but that doesn’t mean it isn’t still effective. Affirm’s reinvention of the sandwich board clearly caught my attention by taking up a small piece of prime real estate in the heart of Manhattan. This type of signage is typically used to draw attention to a special deal/sale that would make you want to enter the store so it would be interesting to know if a straight “pay over time” message really has the same pull. I’d be surprised if it did and can imagine that combining it with a discount on merchandise would have a bigger impact. That said, it’s all about getting the word out and while the format is simple and cost effective, the application is unique and creative.
5. Wells Fargo launches new ad campaign for Active Cash
“Be a 2%er” is the tagline for Wells Fargo’s new series of ads for its Active Cash Card that will run across national TV, online video, social media, and other channels throughout 2024.
The ads feature comedy legends Steve Martin and Martin Short who have been making us all laugh for decades.
Other cashback comedians:
- Capital One: Charles Barkley, Samuel L Jackson & Spike Lee
- Chase: Kevin Hart
- Citi: Dan Levy & Rashida Jones
- Discover: Jennifer Coolidge
Who’s your favorite cashback comedian? A new genre of cashback comedy has emerged! It seems a comedic touch is no longer optional but required for marketers when promoting cashback credit cards. This goes against the grain for most consumers who are more likely to agree that the importance and everyday implications of personal finance may necessitate a straightforward approach in financial services marketing rather than a humorous approach. Yes, credit cards are a serious business but I’m all for the humorous approach given that there are plenty of other things to take seriously in this world.
