Payy Launches a Light-Up Stablecoin CardStablecoins and stablecoin cards are a hot topic (see, Me, Elsewhere, below). Payy is a self-custodial wallet app that today launched a Visa card to support using these self-custodied cards in the real world. PLUS, it lights up when you tap it. Cool. I love cool card stuff. As Payy says, “Spending crypto in the real world is a mess. Traditional flows involve bridging, swapping, and off-ramping with exchanges. Other crypto cards only add risk, leaving behind public trails that expose your on-chain funds. That’s a problem if you want to use stablecoins to buy a coffee, take a cab, or book a hotel.” To solve this, Payy built a custom blockchain (the Payy Network) to create private stablecoin spending. You can check it out at payy.link. The folks at Payy sent me a test card and it is a unique process. You use your phone to encode the plastic card itself with the Visa card number provided in the Payy app. From there, it works like any other card. How cool is a light up card? So cool that my 16-year-old was impressed. Consumers Are StrainedA couple of recent news articles started me thinking about broader changes in the economy and their impact on cardholders. Credit cards represent a unique type of loan: they are open-ended and revolving, meaning that consumers borrow what they need, when they need it. Few credit cards are secured (although some are, including by homes or cars). Your access to credit, your interest rate, and your credit limit are set based on what your finances look like at the moment of underwriting. While poor payment behavior can affect your access, if your credit score is slowly degrading due to other loans, your credit card issuer can’t proactively do much about it. The Wall Street Journal published a report on July 25 (and then printed it on August 5), entitled “Banks Are Getting Pickier About Whom They Want as Credit-Card Customers” noting that the number of cards being opened at top credit card issuers (Wells Fargo, Citibank, Bank of America, and American Express) declined 5% year-over-year in Q2. National credit card issuers frequently update their underwriting standards and goals. To a bank, a loan is an asset, but asset growth must be properly managed (read, constrained at times) to balance risk. When I was Chief Product Officer at Bankrate (creditcards.com), our results were often impacted by this type of behavior. If Capital One or American Express decided their loan book was a bit large one month, they might pull back on advertising and approvals (scuttling our revenue growth). However, they might return to the market in a big way the next month. At the same time, the article notes, credit card spending continues to grow at a rate higher than inflation or economic growth (GDP): The U.S. continues to see a bifurcation between top earners and lower-income earners, leading economists to note the emergence of a K-shaped economy. Credit cards reflect this: while top spenders may have plenty of cash and a desire to keep spending (and using credit cards transactionally for rewards), lower income segments are using cards as a way to stretch their budget. The Journal followed up on July 28 with an article about upcoming rate changes: “Credit-Card Users Are Cautious Now. Rate Cuts Could Open the Floodgates.” Credit cards are very expensive lending tools, in part because of their flexibility. If you are of good credit and know you need some money for the next few years, you would be better served acquiring a fixed-rate personal loan. As shown in this chart, the increase in rates over the past couple of years due to inflation far outpaced previous credit card rates, leading to multi-decade highs: As I wrote in CardsFTW #154, branding enables banks to charge very high rates on cards - rates that are higher than justified by pure lending risk. Banks need to balance increasing risk as consumers are stressed by rising prices and a weakening economy (see, tariff nonsense and last week’s jobs report) and credit lines that are already available to them are a good place to go, even if the money is expensive. CoreCard SellsCoreCard, which powers the Apple Card issued by Goldman Sachs (for now) agreed to sell itself to Euronet Worldwide, a payment processor, for $248 million dollars. The Wall Street Journal has a good profile of CoreCard CEO Leland Strange. I first heard of CoreCard when my friend Aaron Frank built Final Card on the platform. Goldman Sachs bought assets off Final (and hired Aaron and his team) to build what became the Apple Card. (That story is an interesting one about how startups can innovate features and create life-changing programs through odd journeys. When I started working on Vertical Finance in 2019 with the goal of building credit cards, I hoped to partner with CoreCard, but was told that they were very busy with something (I now know was the Apple Card) and not to even try. I found a partner in Deserve, which also processed on CoreCard and provided key program management features. I was glad to be in CoreCard’s ecosystem and excited to be receiving webhooks from their platform as we built the Grand Reserve Mastercard in 2020. (Not that that card worked out very well, but that’s also another story.) I’ll be watching to see what EuroNet and CoreCard are able to do as a combined company. As highlighted in our recent core processor report, CoreCard is a fully featured platform. I think folks have been concerned about CoreCard's future given Goldman Sach’s very public moves to sell the Apple Card portfolio. That concern should be reduced as CoreCard pairs with a larger company and continues to earn interesting new business, powering customers globally, including challenger cards like Nibbles and Coign. Who knows? Maybe the unique features Apple requires will enable CoreCard to become a supplier to JP Morgan! Credit Card.YeahBooking.com, part of the enormous Booking, Priceline, Kayak, OpenTable group quietly launched a new Booking.com Genius Rewards Visa Signature Credit Card, issued by First Electronic Bank and managed by fintech program manager Imprint. Booking’s sister company, Priceline, has long offered a Priceline Visa card (currently issued by traditional provider Barclays), but to my knowledge this new Booking.com card is a first for the company. The new Booking.com card earns $150 in travel credits for use at Booking.com after spending $1,500 in the first 90 days, 6% travel credits on stays and 5% on other travel on booking.com, and an upgrade to Genius Level 3. I don’t know anything about Genius Rewards, but a Level 3 gets you discounts on stays and rental cars, plus priority support. While there are so many travel cards, the online booking platforms don’t all offer them. Many of these travel platforms operate numerous brands. Competitor Expedia Group offers the One Key card for use across Expedia, VRBO, and other sites. It looks like Booking.com group will keep its brands separate (at least for now). Over to you, Airbnb - where's your card?
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Flex Launches a Visa Infinite Business CardFlex (no, not that Flex; again with the naming, fintech people), which offers accounts and cards for business owners, launched a new Visa Infinite business card. Flex is a 60-day business charge card, providing business owners with a long grace period to repay loans at no interest. In contrast, many popular fintech business cards like Ramp and Brex offer no grace period following a statement close (you pay as soon as the statement closes). Much like the legacy American Express Plum Card, Flex provides different benefits based on the cardholders choice of repayment behavior: - Maximize cash flow with extended float
- Earn up to 1.75% unlimited cashback for early payment
- Or, earn 1.75x points redeemable for travel, gift cards, or statement credits
Visa Infinite is the top-level product from Visa with more built-in benefits than your typical card (which is often a Visa Signature product). These include benefits like: - Priority restaurant access via OpenTable
- Unlimited global airport lounge access with Priority Pass
- Luxury hotel perks, including upgrades and on-property credits
- 24/7 Visa Infinite Concierge support from anywhere in the world
- Premium travel protections, including trip cancellation, lost luggage, and primary rental car coverage
- Robust purchase protections, extended warranties, and return coverage
The Flex Visa Infinite Business Card is issued by Lead Bank. FintechDevConI’m in Denver, CO, heading into day two of Fintech DevCon. I had the privilege of giving the conference opening keynote yesterday, “Simple to users, brutal to build: What rewards ledgers teach us about fintech architecture” A video of the presentation will be posted by the excellent team at FintechDevCon and Moov soon, and I will be sure to share it in the newsletter. Thank you to Wade, Janell, Lauren, and the entire conference team for having me! Me, ElsewhereI published a deep dive into stablecoin cards for This Week in Fintech’s Signals, Stablecoins on Plastic: The New Wave of Crypto-Powered Cards. Head on over and check it out! I was quoted in badcredit.org about rumors of the Apple Card moving from Goldman Sachs to JP Morgan Chase, and its implications for subprime issuing at Chase. CardsFTWCardsFTW, released weekly on Wednesdays, offers insights and analysis on new credit and debit card industry products for consumers and providers. CardsFTW is authored and published by Matthew Goldman and the team at Totavi, a boutique consulting firm specializing in fintech product management & marketing. We bring real operational experience that varies from the earliest days of a startup to high-growth phases and public company leadership. Visit www.totavi.com to learn more. Interested in reaching our audience? You can sponsor CardsFTW.
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