How Cardless Could Revolutionize The Credit Card Industry

Now we know who has paid that “enhancement” of this Blog… Bye bye Brex, hello Cardless

You’d think since Cardless was paying you to write this they wouldn’t have made the message so blandly uninteresting.

I was hoping the redesigned site was just a UX growing pain, and not a sign of the commercialization of OMAAT, but I fear this post puts it beyond all doubt: OMAAT has jumped the shark into TPG land.

So sad, as I've enjoyed your posts, Ben, since back when you were signing them lucky9876coins...

Um brex??? Careful what you push pre-product, don’t want to end up like GSTP pushing that garbage upgrade scam

I want to know if I can move my Manchester United “points” into something else or if I should just cash them out now.

The customer service is absolute shit. Apparently that's what the revolution means - worse than Amex, Chase, and Citi.

It's an interesting concept but I think they're going to have brutal competition from Google Pay and Apple Wallet, since they offer perks (especially cashback) that are stackable on top of the general card perks (such as 3x travel on CSR).

Also - "applied for over 100 cards himself". Are there even 100 cards in existence? Genuine question...

This is the MBNA 'affinity cards' biz model that cluttered the landscape pre 2008 - hundreds of alumni associatoin, sports team, etc had a 'rewards' program that offered little useful beyond cash.

The best rewards are perishable inventory that would otherwise go unused - which is why airline and hotel miles are so valuable. Just about everything else is a modest rebate that's hard to compete with straight cash rewards.

Sorry but I see a lot of marketing bafflegab without anything hard and fast that makes this compelling. It's great that smaller brands can get into the game but what's in it for Cardless. Sure Uber was a great deal for us but they have yet to make money and won't until transit becomes a monopoly.

To take the perishable inventory thing further...

Would be great to get high value premium concert seat at a material discount via a rewards program - or a day of baseball game seat upgrade for points that's at a superior value - not some quasi cash level. Like the first class intl award - 5 to 10 cents per dollar spent to get the reward in value.

Not sure you need this program to deliver it and not sure it solves why that isn't offered. But they should focus on those kinds of things if they want readers here interested.

Looking at their Cleveland Cavs card there's nothing revolutionary - in fact pretty uncompetitive. 1 cent per dollar gift card rewards. No ability to use poits to get premium seating at a discount / much better than 1 cent per dollar spent value. Wasting time.

First off, thank you for disclosing this as an advertorial. This is very important.

I do have some points to bring up.
1. If the last new major issuer was Capital One 25 years ago, it still is.
2. "The company plans to assemble a consortium of lenders" - Adding itself as another middle man doesn't save cost, it adds cost. Not quite the idea of lean.
3. "We’ve never really seen the concept of launching a credit card be as accessible and easy" - I don't know the details but Synchrony or Comenity having around +100 cards each doesn't make it look difficult either. Nothing new here.
4. "offer unique, valuable rewards" - They really need to make it unique (and still earn profit). Can they really beat Citi x5 or Amex x4 on restaurants or travel. Too unique would hardly attract everyday user.
4.1 The “one size fits all” stuff like TSA precheck means the bank knows if you have more than one card, they can save this cost without losing the benefit list.
5. "has a technology focus" - This and this alone is really the decider if it will succeed or not. So far, they rush to launch a bit too quick. But if they can cut cost enough using technology, they can still make it.

I don't see how this is disrupting anything for now. The main drivers are still interest and fees to make money. It still needs a large scale to be sustainable. And if its grows big it loses it's flexibility.
Do you think the no branch, online only banks disrupt banking? I don't think so.

Promoting this product here where readers are card savvy would mean the product will only be used when that one single usage is better than Chase Amex or Citi. That is a very high cost to them. If it's going to succeed, they need to strike a balance of lending to the subprime and debt recovery, which is Capital One's territory (and maybe why they are the last major issuer in the last 25 years, they found this segment). If they are after sub subprime, they should be handing out cards at thrift stores and foreclose homes to pay credit card bills. (which I can consider they disrupt the bankruptcy and foreclose numbers)

As far as I see, their exit would be to sell off the technology to larger banks if they operate long enough. I'm sure they are very good at pitching it to investors (who probably have only 2 credit cards).

Give us a $1000 bonus, we'll use it until we get the bonus then we put it away and go back to Chase.
Wait is that why readers here missed out on the Manchester United bonus?
By the way, how is Brex doing?
Any readers who have a Brex account still using it?

Ben,

I think your disclosure was appropriate. My two cents is that I'm on board with you introducing sponsored posts for financial products and things like travel insurance, but I would be very uncomfortable with sponsored content (even properly disclosed) from travel organizations. I stopped trusting TPG after he took Marriott's invite to the Oscar's a few years back. Please don't mess with your independence around the companies you're in a position to review.

If you're going the way of sponsored adver-posts, I'm going the way of finding another blog to read and trust.

Like saying "I am a people person because I am also a person"

TL;DR- it won't

Thanks for always disclosing when it's an ad 🙂

Awful, and not innovative.

Grateful for the full disclosure that this piece was in part put together by the company in the post. I don’t think this will gain any meaningful momentum in its current configuration, more out of the box thinking is required by credit card providers on how they can become novel in an ever increasing crowded market.

I hope they're paying you a lot to jerk them off like this

I thought that TPG was the sell out to the card companies….but this ‘review’ feels like it’s straight off a careless pitch deck. So sorry you sold out.

@ kay_elemeno -- We agree with you. Our advertising and ethics policies are linked at the top and bottom of every page, and the latter addresses specifically that.

Ben, I’m not gagging.

I feel less informed than when I started reading this

This was really, really bad.

This model has existed before with MBNA. No one cares about the app. And as far as simple cards go, a double cash is a far superior card on any level. No innovation needed

This is a shill job and a really bad one.

Love the blog Lucky, but this feels more like a sponsored post than anything else. Really disappointing to see though I hope I'm wrong. Maybe I am...

The only factual differentiation you point out is how they fund their cards and thus can open an individual card up to a broader audience (although each individual card looks like it will cater to a large proportion of a small sub-audience).
You don't explain what they do that makes them more nimble, why they have a lower cost structure, or how their tech is any better than the tech of any other issuer.
Looking at the benefits of the Cavs card, .5 cents back per dollar? Or 1 cent if you'll take it in the form of a Cavs gift card?
Am I missing something? I fail to see what is compelling about them.

No amount can be worth this. This cardless model sounds like dog crap wrapped in a chocolate wrapper. Don't make anyone eat that.

So the idea is that they provide credit to people who would better not get credit, lure them into spending more than they should with creative “rewards“, and then make their investors rich with the interest payments from the half-broke consumers who ideally are never able to pay back their debt and just keep paying interest for ever. Genius.

V disappointed to see this post. No substance whatsoever. Complete informercial. Hate to say it, but others are right, this feels like a step towards TPG.

If there's a number more like these, you're gonna lose the genuine readers who want unvarnished. honest views. I understand that may happen - as TPG has shown, it can be very lucrative. It's your blog/site, so completely your choice of course.

Ben, I've read every single post you've written in the past decade. The reason for this is that every single post has been written by you (or Tiffany etc.) based on your personal experience. Very disheartening to read this sponsored post. Your readers are here to read your posts not sponsored marketing nonsense. I hope you don't turn into the next TPG.

Agreed. This post is awful.

"Cardless has a teChnOloGY focus" yet doesn't have an Android app thereby disregarding 80% of the world's smartphone and close to half in US.

Also Ben, you know very well how 'compelling' their cards currently are...cashout points for 0.5x. Its worse than Amex or even using points for Amazon purchases, that you actively seem to discourage elsewhere 🙂

This is literally just a press release. What is the point of this? There's no product for us to apply for? We can't help this company forge new partnerships even if we wanted to.

He says at the top that this is a sponsored post.

I read that whole thing, I still don't really understand what Cardless is, but I have excellent credit (like probably 95% of OMAAT readers) so my only takeaway is Cardless isn't for me. Congrats Ben, on the big payday though.

Like many others, I will share a 'thank you' for disclosing that this was sponsored content. And with that said, like many others, I will share a 'please stop'.

I give a pass on the credit card pitches because 1) you need to make a living, 2) I get value from the other content you post, and 3) I even sometimes learn something or get a redemption idea from the credit card posts.

But this? No. Just no.

OK, a few things:

1. An iOS app doesn't make a company "technology focus." Seriously. It's not even on all mobile platforms.
2. I am not sure how valuable the knowledge of Cardless is... It's like knowing that Netflix runs on top of AWS (now, these *are* serious tech companies). Does it even matter? If tomorrow Netflix decides to move to Microsoft cloud, do we viewers care?
3. By the by, Cardless' supposedly lower transaction cost (I am not exactly sure how this works out...) doesn't automatically or even necessarily translates into better rewards. If anything, it's the other way around. If each transaction "costs" less, that means the company (Cardless) makes less revenue for each transaction, which means less money for reward.
4. I am not 100% sure if trying to get *everyone* on reward credit cards is a good idea. Reward for spending is a tricky thing. It's good if you can control your spending. It's not as good if either you can't or you are still learning. Given the level of personal saving rate and consumer debt in USA, do we really want more reward for spending?

I mean, I am as exciting about anyone else if there is a good credit card product. But until that happens, well, let's keep cool and try not to make this looking like an advertisement.

Is this a sponsored post? It should be labeled as such.

Do you have a source for your claim, "The credit card issuers that do exist all have high costs, and aren’t exactly lean operations".

It sounds like a line from Cardless's VC pitchdeck. Would be nice for some footnotes showing you validated their claims.

Standard fintech startup disruption playbook is to provide no customer support.

While I understand and support you in making a living from the blog via the credit card pitches (I got my CSR from one of your links!) and via the advertisements, I don't like that this post has been the top post on the traditional "blog" part of your site for nearly a week. Maybe these types of posts could be up for 1-2 days or so in the future and then come down to feature the latest content as you did on the old site?

Ben. Why would you link to this in today’s (6/21/22) post? I missed it until now, and…just wow. Ben. Blink twice if you need us to call for help.

Stay away from cardless credit cards, they do not monitor fraud and they do not have a fraud call center off hours. A friend of mine had there number stolen. Couldn’t get a hold of anyone and left him liable for fraudulent charges. All around bad business!!!