Programming Notes

Today’s newsletter is the final CardsFTW for the year. We wish you happy holidays and a great end to your year. See you in 2025!

Also, we're aware that some subscribers may not have received our issue last week. You can catch up on last week's credit card news and a deep dive into PIN-less debit in CardsFTW#135.

Stocking Stuffers for Your Favorite Fintech Nerd

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No, You Can’t Have One Card to Rule Them All

King Credit Card, Sovereign of the Wallet, Keeper of the Points, and Ruler of Commerce.

My love of credit card rewards started in 2004 when, as a junior strategy consultant at Deloitte Consulting, I was thrown into the travel-every-week lifestyle. It wasn’t very glamorous; I flew from Los Angeles to somewhere in the Bay Area every week for about 18 months, but it sure did involve a lot of airplanes and hotels. Business consultants were early to the credit card reward maximization game, and my more experienced colleagues taught me how to optimize my spending.

Over the next seven years, I continued to travel quite a bit through two other jobs - one to two dozen trips annually. I slowly acquired a few more cards, ending up with five. While pumping gas at the Shell Station near the Burbank airport in 2011, I realized that managing my cards was too hard and was inspired by all of the ways that software could fix it. The idea for the Wallaby card was born.

I designed the Wallaby card to be a physical card that would sit in front of a cloud-based digital wallet with each of your other credit cards. You would set preferences and then swipe your Walalby card in person. We would reroute the transaction in the cloud to the preferred card based on rewards, fees, interest rates, etc., so that you didn’t have to worry if you were using the right credit card; we would just do it for you.

Consumers loved this idea, but banks did not. We had a plan for how to make this work for banks and make the economics work (people probably will ask how we dealt with the interchange, but we did have a plan).

We planned to go live with an issuing bank and a prospective network deal with Mastercard by late 2012.

Well, it didn’t work out. It turns out that the big banks and payment networks do not want you to build an over-the-top credit card-optimizing wallet that subjugates the branded bank cards. While it wasn’t technically against the rules when I started Wallaby, Visa and Mastercard changed the network rules (I got their attention in a bad way) so that you cannot run back-to-back transactions.

Yet, people keep asking me about this. I receive a message asking me how to build the Wallaby card every month. UK-based provider Curve came to the U.S. to do this, but while they had a deal with Mastercard, Visa and Amex blocked them, so there was no point. They are back on a waitlist for their “comeback tour.”

A couple of years ago, a team built a card called “Percents” on Stripe’s platform doing the basic Wallaby stuff and claimed to have a waiver from Visa. I had one of their cards briefly, and it worked, but it no longer exists (the entire company).

The moral of the story is that some ideas can’t be developed due to business dynamics. If Visa, Mastercard, Amex, or Discover do not want to allow an over-the-top digital wallet, they simply don’t have to. (In the UK, where Curve originated, they have to allow access due to separate open banking regulations.) 

There is a possible future based on the open NFC APIs that Apple and Google now provide to select the card in the digital wallet, which would be a good step. The issue is that the consumer ideal (a smart wallet that optimizes for YOU) contradicts the bank ideal (you use the same card for everything that isn’t optimized).

Netflix + Mastercard

How many hours of streaming does it take to be classified as a "Netflix house"?

Netflix and Mastercard have teamed up to offer exclusive perks to Mastercard credit cardholders in the United States. This new partnership aims to enhance the Netflix experience for Mastercard users.

Mastercard cardholders will gain access to unique live experiences related to popular Netflix shows and movies. These events may include immersive pop-ups, exclusive screenings, and meet-and-greets with talent. They will also offer cardholders the opportunity to purchase limited-edition merchandise inspired by Netflix content. This could include collectibles, clothing, and other themed items. While specific details are not provided, the partnership hints at potential improvements to the Netflix streaming experience for Mastercard users. I don't know what that could be. All your streaming in 8K for free? Ability to share passwords?

For Netflix, this collaboration represents diversifying its offerings beyond streaming content, opening new revenue streams, and enhancing customer loyalty. For Mastercard, it provides an opportunity to offer unique value to its cardholders, potentially driving increased card usage and customer acquisition—yet another example of cards as lifestyle platforms.

New Alaska Premium Card

Bank of America and Alaska Airlines announced a coming new premium card for next summer, following the successful merger of Alaska Airlines and Hawaiian.

It looks like a primary feature is the card may be black.

Maybe they haven't agreed to a design yet?

There are some details, like new global companion certificates (the standard card includes an annual companion certificate for domestic flights), 3x miles on all foreign purchases, and dining. Usually, you get charged a fee on foreign purchases, so bonus miles are a new one for me. The card also comes with lounge passes, Wi-Fi passes, and elite status acceleration.

If you sign up today, you will earn 500 miles just by preregistering. If you are approved for the card, you earn 5,000 bonus points in addition to the standard signup bonus. (This is precisely how the Grand Reserve World Mastercard waitlist worked!)

I imagine this card will cost $450 or more and be filled with benefits. I’m curious about the full slate of offerings and am excited to see what they bring to the market.

CardsFTW

CardsFTW, 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.

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