This past week saw the official announcement by BBVA that they are sunsetting the Simple platform.

Simple is credited widely as being the original neobank and its people, customers, and product paved the way for the boom of challenger debit card startups that abound today worldwide. Its founders are uncommonly good people and the product showed real care and love for its users.

Many have taken to the web to discuss how Simple impacted their lives. I wish I could share a similar story, but I had identity verification issues and could never get an account! (It’s a story, but let’s just say that my previous years of acquiring every prepaid debit card in the market for research at Green Dot probably had something to do with my identity verification problems.)

When Green Dot and NetSpend pioneered the reloadable prepaid debit cards and largely sold them through retail and check cashing stores they were servicing a customer who couldn’t or wouldn’t work with a traditional bank. Those products were very stripped-down and focused purely on turning cold hard cash into digital funds on a Visa or Mastercard card.

Simple took an entirely new approach, combining true personal financial management with an account, enabling people to better understand and use their money. It was truly more than a basic checking account; it was a built-in advisor with budgeting features and a path to better personal finance.

Building new personal financial management apps is always a challenge because you rely on underlying banks to provide products. Data access and accuracy can be a huge challenge. By combining the software with the banking layer, you can create a truly new experience.

What is BBVA’s loss will be other neobanks gain, as Simple customers will migrate to new challenger cards. There is an overwhelming number of options today and I am sure customers will find a new solution, but also miss some of the unique capabilities of Simple.

Rebooting Green Dot’s GoBank

Speaking of original fintech companies, Green Dot announced the launch this week of Go2Bank. This appears to be basically the same thing as GoBank, which was an online version of Green Dot, which I thought was what they called Green Dot Unlimited. To be frank, I’m confused. This product appears to carry the same features as Chime or other challenger banks, but with worse branding. New CEO Dan Henry (about a year into the job, coming from prior time at competitor NetSpend) says that GDOT is very undervalued. Having spent a formative three years at Green Dot pre-IPO it is sad to see the company flailing like this.

Green Dot needs to decide what it wants to be when it grows up. Does it want to be a Banking-as-a-Service platform, based on its Uber, Apple, and Intuit products? Does it want to be a consumer brand? If so, does it want to be modern and online or focused on its core retail product? Continuing to revamp the same leftovers is not the answer. There is an entirely new management team, but it doesn’t look like there is new thinking.

If it were me, I would split the company into two parts: a bank with a BAAS platform and a consumer front-end. They have significant challenges as whatever Walmart is doing with Ribbit Capital is likely to be negative for the Walmart/Green Dot deal.

(If you’re reading this Dan, I’m available for consulting. I live just a few miles from Green Dot HQ.)

Samsung Shuts Down Rewards You Didn’t Know it Had

Samsung announced the end of a rewards program for USA Samsung users that encouraged them to use Samsung Pay. I’m not sure how many people knew about this program, but putting these meta programs on top of an existing credit card with its own rewards program is hard. This is not a big loss for many users, but it is good to take note of the challenges of being an additive reward program vs. a core rewards program. If a rewards program doesn’t drive behavior, then something is not working and when you’re layering it on top of another program, it rapidly gets confusing.

American Express Gets in Trouble

American Express has been under scrutiny for its small business card program sales tactics over the past six to twelve months. News broke last week that an alphabet soup of Federal regulators are probing what are reported to be unauthorized accounts, misleading sales tactics, and more from the small business sales group. Like the Wells Fargo scandals of the past, AmEx will maintain this is the behavior of isolated groups, but the approved incentive structures are part of what drives this behavior and top bankers need to be held responsible. Regulators should come down hard on big banks when they fail to manage their internal processes. These are complex products and it is easy for consumers (or small businesses) to be misled.

American Express Tries to Keep Platinum Relevant

All travel cards have struggled to stay relevant during the pandemic. Personally, I downgraded mine to save cash when my travel spending went to zero. I have a lot of miles, so I can’t cancel the card entirely, but there is not much value to points I am not going to spend. The company has tried several things, previously doling out a credit for streaming services like Netflix and now launching a $30 per month PayPal credit. Giving people money for using PayPal seems like a clever strategy to get people to add the card to their PayPal account and then forget they changed cards and use it for everything. I am skeptical this works; I imagine the people who are paying close attention to these benefits are good at gaming it. That said, if you did maximize this you could save $360 per year against a $550 annual fee, which is a pretty good deal.

The question is, how long can AMEX afford these types of benefits?

Challenger Credit Card Startup Goes for the Sweeps

Petal, the challenger credit card startup helping people to gain access to credit, launched a limited time offer that enters users who pay more than their minimum payment into a sweepstakes to win $500. This is pretty gimmicky, but it will probably work because people love free money and paying even $0.01 over the minimum gets you an entry (against a very small cost for Petal). This reminds me of the radio promotions where KIIS (or whomever) pays your bills. Look for fun promotions soon from other challenger card products. Moving beyond pure points and cashback is an innovative way to drive engagement and signups.

Walgreens and Synchrony Plan to Launch a Mastercard

Just when you thought every major retailer in the United States had a credit card, you realized that your local drug store doesn’t! Well, don’t fret. Walgreens, together with Synchrony, is planning to launch a Walgreens Mastercard tied to the new myWalgreens rewards program. The deal also includes a prepaid debit card program, which, again, can’t be good for Green Dot who has boasted a prime position for prepaid debit at Walgreens for more than a decade. Details are scarce (the product will launch in the second half of the year), but you have to ask yourself one thing: Who wants a Walgreens card?

CardsFTW

Thanks for reading CardsFTW, a weekly newsletter about all things debit and credit. CardsFTW is written and curated by Matthew Goldman, Founder, and CEO at Vertical Finance, a challenger credit card startup. If you’re looking for insights into everyday payments beyond deal blogs, please subscribe for free at cardsftw.substack.com. If you enjoyed this, please share it with a friend! Follow me on Twitter @magoldman.