CardsFTW #105: New & Improved Corporate Cards

Wells Fargo Launches a New Business Card

Wells Fargo announced its new Signify Business Cash Credit Card last week. The card shows that Wells continues investing heavily in growing its credit card business (moving up two spots from 10th to 8th since 2022, with 12.8% higher purchase volume, according to the Nilson Report). Since its account opening scandal showed that Wells was not, in fact, good at convincing real customers to open real accounts, Wells has had to shift to offering competitive cards to the general market.

New cards of the past few years at Wells Fargo have been in the consumer space, including the rapidly growing Bilt Rewards card. Now, we have the first major new business card.

The new card carries a strong and simple structure: unlimited 2% cashback, no annual fee, and a 0% introductory APR, a relative rarity in this current interest rate environment. Wells offers a $500 cash signup bonus after spending $5,000 in the first 90 days to sweeten the deal further.

There are a few other 2% cashback business cards, such as the Capital One Spark 2% Cash Plus card, although that card has a $150 annual fee (but you could earn $1,200 once you spend $30,000 in the first three months!). American Express’s Blue for Business Cash card offers 2% for no annual fee but limits that to the first $50,000 spent each year, after which it drops to 1% cashback.

Chase offers the Ink Business Premier Credit Card, with 2.5% cashback on large purchases of $5,000 or more and 2% on all other purchases, but again with a $195 annual fee.

All-in: the Wells Fargo card is a solid offering. I prefer how Chase’s Ink line allows users to switch between transferable points and cashback, while most other issuers make you choose one option (travel points) or the other (cashback). Wells Fargo has recently introduced transfer partners. However, their selections are limited because the company is late to the game, and many major US airlines and hotels are tied up. It’s unclear to me if the new Signify card can transfer points.

Kudos to Wells Fargo on a strong offering. However, I think they face an uphill climb in entering this market. The hurdle for the average business owner to switch credit cards is higher than that for consumers, but Wells is making a good start.

Ramp Adds Travel Partners

Regarding business cards with travel points, Ramp, the corporate card and purchasing solution that has long-touted a simple 1.5% cashback-only rewards structure, launched travel rewards. Like Wells Fargo, Ramp offers transfer partners that don’t have strong exclusive relationships with other U.S. issuers, such as Qatar, Airfrance, and Qantas.

The Ramp card is a no-fee card and has long focused on its software and services capabilities over pure earning points. However, adding transfer points speaks to something my friend Julie and I covered last summer in a This Week in Fintech Signals piece about corporate cards. In short, CEOs love their travel points; CFOs love the controls of a Ramp or Brex Card. The spending management and control capabilities provided by Ramp and Brex are dramatically higher than the “additional employee cards” offered by traditional issuers like Chase or AMEX. 

As a result of the design focus on spend management, CFOs love cards like Ramp and Brex, where their main focus is managing who can spend, what they can buy, and how much they use the card. Meanwhile, CEOs want lounge access, first-class seats, and travel perks they can use on themselves, not cashback into the business. In addition, travel rewards continue to be in ever-greater demand in a post-pandemic world.

Creating a flexible and robust transferable partner program is the only way I see challenger cards gaining that CEO spend, ultimately driving many final purchasing decisions inside companies. 

GM to Barclays?

The Wall Street Journal reports that General Motors will move its co-brand card offering from Goldman Sachs, which is exiting the consumer finance business, to more traditional co-brand issuer Barclays. Goldman dove headfirst into consumer co-brand with the Apple Card and soon will be left with only the Apple Card. According to the Journal, Goldman’s GM portfolio has underperformed the previous offering from Capital One. I’ve always been suspicious of the consumer value of individual auto manufacturer-branded cards. I covered the launch of the new GM card back in CardsFTW #44 if you want to read my full take on the card. Suffice it to say, I am not a fan and feel proven right on this front.

Car manufacturers and dealers need to try something new here. 

Totavi Research

If you’re reading this newsletter (and have made it this far), I know you have a deep interest in cards and card issuing. I encourage you to check out our research reports, which are produced by the Totavi team and consist of dozens of hours of research, first-party interviews, and endless fact-checking. If you’re considering launching a card business as a standalone or embedded fintech offering, our research is a perfect way to get started. Check out all of our reports at www.totavi.com/research.

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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