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Cards For The Win (CardsFTW) was featured in an edition last week of Fintech Takes. Welcome to my many new subscribers. I hope you enjoy the newsletter!

Business Cards are the Business

The past year in fintech-land has been a rollercoaster (or perhaps a cliff jump). As the era of zero interest rates and free-flowing fintech venture capital came to a close, the dynamics have shifted tremendously concerning what businesses are growing, making money, or raising capital.

Consumer fintech, replacing your local bank branch with a debit card, is on the way out. Embedded banking for commercial use cases is on the way in. Almost everyone I speak to is pivoting or focusing on a business angle.

Business cards are appealing for a few reasons:

1. Higher spend per account. The average consumer debit card might spend $400-800 per month, while business cards will spend thousands per month.
2. Higher interchange fees. Commercial debit and credit interchange fees are quite high (and surprisingly similar), whereas consumer debit is the lowest interchange category.
3. A perception that the sales cycle is easier

I don’t know about that last one: it feels like one of those situations where the grass always seems greener on the other side.

Let’s do a quick survey of some of the many business card fintech companies:

Bend is a commercial card, like heavy-weights Brex or Ramp, but with a climate focus. It is marketed as “the modern corporate card built for climate-friendly business” Bend includes a carbon account on its card. Climate change is real, deadly, and an immediate concern, but I have reservations that the climate plus accounting approach is both scalable and accurate enough to make a difference. The Bend card is issued by Celtic Bank.

Hello Alice is a small business platform with a new credit card offering. The card features the usual features like points and also includes some unique offerings like one-to-one business coaching and earning points opportunities for completing learning activities on the Hello Alice platform. The Hello Alice card is issued by First National Bank of Omaha (which operates the Bend credit-cards-as-a-service platform, not to be confused with the Bend above. Can’t we come up with more differentiated names?)

Owners Bank is a brand of Liberty Bank, a $7 billion community institution in Connecticut. The brand looks and feels a lot like a fintech, though. The brand offers a full range of deposit and lending products for small businesses.

Found is a card for the self-employed. The platform includes banking, booking, taxes, invoicing, and more. The card is issued by Piermont Bank.

Slash, like Found, is banking for entrepreneurs but focused on Gen Z and the “hustle culture.” Key features include an overly heavy metal card (28g!). The card is also issued by Piermont Bank.

TopKey is a spend management platform with a card for property managers. The platform features standard features like a Brex or Ramp, such as virtual cards, spend controls, etc. The card is issued on Unit’s platform and doesn’t disclose a specific partner bank.

HighBeam is a spend platform for ads and offers banking, lines of credit, and a credit card with strong cashback (2%). The fundamental value proposition is monitoring spend through the month as ad platforms charge the card, limiting surprises and creating spending control. The card is issued by Blue Ridge Bank.

DashFi is similar to HighBeam, offering corporate cards focused on managing ad spend. DashFi includes features to help brands select and work with agency partners on the platform. DashFi pitches higher credit limits for the high-spend of many ecommerce brands. The card is issued by Evolve Bank & Trust.

I am missing many other business card startups, and this list is not intended to be exhaustive. Please add other interesting companies to the comments.

Venmo Launches Teen Banking

Teen banking has been a big deal in the last few years. Well-funded startups like Greenlight and Step have made major investments in teen- and child-focused accounts. National banks have joined the fray, with Chase offering a white-label version of Greenlight, but others like Capital One offering their own native product, MONEY.

News this past week that looks like a major competitive move is that Venmo will be launching teen accounts. Teen Venmo cards are for 13-17-year-olds and include parental control and optional access to the Venmo network for peer-to-peer payments. There is convenience and danger here, but this is an important move by Venmo to expand its reach as its existing user base ages.

My kids (14 and 11) have Capital One Money accounts, in part because I have had savings accounts for them at Capital One since their direct operation was the ING platform. It was not easy to get them set up, especially under 13 and without phone numbers, but the accounts work pretty well as far as teaching them about money. However, as they age, I can see them wanting to use Venmo and me wanting to keep an eye on it.

If you want to dive deep into teen banking, I suggest reading Stessa Cohen’s Pivot Asset posts on the topic, starting with Challenger Banks for Teens: The 4 Part Guide.

Terse Words Continue Between Walmart and Capital One

A quick update on the continuing legal battle between Walmart and the issuer of its credit card products, Capital One.

American Banker reports that Capital One is firing back at Walmart over its lawsuit. In the latest filing, Capital One accuses Walmart of suing to terminate their long-term deal from 2018 because it wants to bring services in-house to its fintech joint venture.

That accusation has legs and is consistent with rumors I’ve heard. Walmart has long aspired to own financial services in-house (Does anyone else remember when they tried to get an ILC charter in the early 2000s?) They have been frustrated for years on this front and partnered with companies like Green Dot on prepaid and checking, and GE Money, then Synchrony, now Capital One on lending and credit.

This battle could take years, but I am guessing that all things can be true at the same time. Walmart can want to terminate because they want to bring this in-house. Capital One can also fail to meet some service level agreements (as claimed by Walmart in their suit). Missing these service levels may not have caused a termination if Walmart didn’t want a new arrangement, but if they did, it’s a convenient path.

I’ll be popping the popcorn and watching the show with you!

CardsFTW

Thanks for reading CardsFTW, a debit and credit newsletter by Matthew Goldman. Matthew is the founder of Totavi, LLC. Totavi is GSD Product Consulting, helping to bring real, operational experience that varies from the earliest days of a startup, high-growth phases, and public company leadership. Visit totavi.com to learn more and engage us.

* Indicates a company with whom Matthew Goldman or Totavi, LLC has a financial relationship.