CardsFTW #49: First Mover Disadvantage

Plus, NFL Extra Points, Concerto, and the Possible Card

Curve & Google Pay

We’re one month short of the day 10 years ago when I announced Wallaby to the world. My first venture-backed startup, the Wallaby Card was designed to be all of your cards in one; solving the George Costanza wallet problem by combining access to each of your credit and debit cards into a single physical card.

Curve Card
A bold design, for a bold idea

In an era before mobile payment options, many consumers carried four or more plastic cards in their wallets to optimize payments across rewards, interest rates, or grace periods. I conceived of Wallaby as a way both to reduce the clutter in your physical wallet and as a way to use an algorithm to maximize your payment choices.

The Wallaby Card would be a single physical access device (a debit card, I thought) that would capture your transaction mid-stream and re-route it to the credit card of your choice in the payment networks (cloud) based on the cards in your wallet, your preferences, and the merchant information. We would need to be both a card issuer and what we now call a payment facilitator (at the time, known as a merchant aggregator).

It didn’t work.

I never could get the payment networks to approve the model. Also, the economics probably wouldn’t work out. We had a monetization plan, but that’s beside the point as in early 2014 Mastercard called us up and gave us the final nail in the coffin: they would not approve the model.

Later on, Curve launched in the UK and EU. Due to the open finance laws in the region, Curve was able to force an entry for an all-in-one card product for Visa and Mastercard cards, although American Express cards do not work in the EU/UK wallet. In addition, they are not able to steer payments based on an algorithm like we wanted to do with Wallaby.

Curve is now launching in the USA. My spot on the waitlist was up this week and I was excited to add Curve to my wallet. There are still limitations, though. Although you can add Visa and Mastercard debit cards, you can only add Mastercard and Discover credit cards. The Curve card itself appears to be a Mastercard credit card issued by Hatch Bank. So I can put one Mastercard in front of three of my other cards (two Mastercard cardss, one Discover). However I, like many Americans, have more Visa products than Mastercard ones (Visa has a 2:1 winning share in card count).

Curve isn’t (yet?) what Wallaby was intended to be. It’s exciting to see some progress. The payment networks, with their power, continue to limit consumer choices in this way.

Google Wallet

Also this month, a friend alerted me to an announcement out of Google’s I/O conference highlighting the possibility that Google will launch card selection intelligence into Google Pay.

When we were unable to launch Wallaby as a physical card, we pivoted to an app-based model and provided real-time intelligence on what card to use in what situation. The app included location services that would push an alert to you so you didn’t have to remember to look (such as “getting gas? use your Chase Freedom”).

With the advent of mobile payments, the smart move here would be for mobile payment companies like Apple or Google to include Wallaby-like intelligence in the payment experience. Let’s say that I had this conversation with the tech titans over the years (and several major banks), but it didn’t go anywhere. If someone reads this and wants to pursue that path, let me know!

Grand Reserve

As readers of CardsFTW will know, my last startup was an attempt to launch category-specific specialty cards not tied to a single retailer, but a network of merchants in a high-passion area. The Grand Reserve card (no longer available) rewarded wine enthusiasts across more than 450 wineries and wine merchants.

I was surprised to see the announcement of the world’s second-ever wine rewards card: The Vice Wine Rewards Visa Card. The new card is for a wine club brand, not for all wine lovers in general, and is issued by Imprint, a credit-cards-as-a-service startup. I would never have guessed another wine rewards card launching in 2022 on the heels of Grand Reserve going away.

First Mover Disadvantage

I don’t intend to come across with a “hey, I had that idea first” vibe. Success in product development is about timing and execution. Often first movers get this wrong. Google is not the first search engine. Facebook is not the first social network. Dropbox is not the first online file-sharing service. I wish the best for these new products. I am always excited to see innovation succeed.

These products highlight a few things about new products and about payments:

  1. Timing matters
  2. Network rules and governmental regulations change
  3. Payments (fintech) are slow to change

In Other News

A few other recent news items that stuck out to me to highlight (with limited commentary):

NFL Extra Points

There is a new NFL Extra Points Card program, issued by Comenity Bank (Alliance Data / Bread). The NFL card program has always struck me as a better way for a bank CEO to get into the Super Bowl than a solid program. Lots of noise around sports team cards these days, but from what I know, at least historically, this is not a great program for profitability.

NFL Extra Points
Vertical cards are all the rage

Concerto: Credit Cards as a Service

Another credit-cards-as-a-service platform is coming on the scene. Concerto announced its fundraising and looks to be going head-on against Cardless, Deserve, and Imprint in the fintech space that compete with Comenity, Synchrony, Capital One, and Chase.

Possible’s New Entry to Credit

Possible Finance announced a new credit card. It is an interesting product with no stated interest or late fees. Instead, the card charges a flat monthly fee, includes an $800 limit, and claims not to require a security deposit or credit check. It sounds very friendly to consumers. It also sounds very challenging as a business model. Shortly after the announcement, Possible announced that more than 150,000 people are on the waitlist. That’s not surprising, people like free money. The Possible Card issued by Coastal Community Bank.

Possible Mastercard
Three vertical cards today. A new record.

CardsFTW

Thanks for reading CardsFTW, a weekly-ish newsletter about all things debit and credit. CardsFTW is written and curated by Matthew Goldman, Chief Product Officer at Apto Payments. 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.

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