Not the Points!


Apr 08, 2024


Sarah Parsons Wolter


Apr 08, 2024


Sarah Parsons Wolter


In the realm of fintech, who better to learn from than credit card companies when it comes to walking the fine line between appealing to customers and maximizing profitability. Thanks to rewards schemes, credit cards have become experts in this field.

Interchange fees are at the heart of the business model, playing a pivotal role in incentivizing spending and shaping credit card reward programs. In other words, card issuers leverage an interchange fee to secure participation in their particular card ecosystem and in turn, capture the most desirable customers. These dynamics are especially important in a world in which consumers have significant optionality with the channels through which they spend their money.

Card issuers continue to come up with creative strategies to acquire and retain customers, but beyond the headline sign up bonuses and targeted marketing tactics that we’re bombarded with in every news article, magazine, and other source of content for your stereotypical “high spender”, reward structures are often intricate and multi-faceted. Issuers design these programs to appeal to different consumer segments and behaviors, offering various incentives and bonuses tailored to specific spending categories or preferences.

However, regulatory changes have the potential to impact interchange rates, fee structures, and consumer protections. The Consumer Financial Protection Bureau (CFPB) has honed in recently on card issuers’ tendencies to obscure T&C that allow them to discreetly adjust rewards or redemptions. If successful, you may never again have to worry about that fully points-funded holiday slipping through your fingers!

baby in the pool

Portfolio News

MoneyLion receives consensus rating of "Buy" from brokerages - Needham & Company assumed coverage on MoneyLion in a research report this week, issuing a "buy" rating and a $90.00 price target for the company. Read more

FT ranking: The Americas’ fastest-growing companies 2024 - Congratulations to portfolio company Simetrik for making the FT's fifth annual ranking of the fastest-growing companies in the Americas. Read more

GLIF launches points program for storage and liquidity providers on their network - Filecoin capital market and re-staking protocol GLIF recently launched a points program for storage and liquidity providers utilizing the network. The program represents GLIF's first steps towards decentralizing protocol decision-making and, in the interim, serves as a new community engagement mechanism. Read more

Playgrounds’ BRC20 Substream enables streamlined access to Bitcoin data on The Graph - Playgrounds' new BRC-20 Substream module enables streamlined access to historical Bitcoin data, making access to Bitcoin-related data faster and easier than ever. The Graph is now utilizing Playgrounds' BRC-20 Substream module to power access to Bitcoin data for users of The Graph. Read more

Not the Points!

Anatomy of a credit card rewards program - The basic intuition underlying rewards cards as a product is that highly desirable customers have options in how they spend their money. You can directly influence them to use your rails by making those rails more lucrative, more fun, or both for the customer. And so card issuers (and the networks) compete with each other for so-called “share of wallet” by bidding with interchange. Read more

CFPB’s credit card rewards scrutiny threatens a perk consumers really love - Among the issues to be examined: Whether and how some credit card issuers conceal terms and conditions that may allow them to revoke rewards or make the points difficult to redeem. The news follows Chopra’s remarks last year that his agency would look at how points programs are constructed and how they are redeemed. Read more

Industry News

Chase shows super app ambitions with media platform launch - The bank unveiled its latest venture, a retail media network called Chase Media Solutions, marking a move toward personalized advertising within the banking sector. While retail media networks have become a fixture, what sets Chase apart is its claim to be the “only bank-led media platform of its kind,” providing brands direct access to its extensive banking customer network. Read more

Fed blocks tough global climate rules for Wall Street banks - European central bankers have been advocating for the Basel Committee on Banking Supervision to agree on requiring lenders to disclose their strategies for meeting green commitments. In closed-door meetings, US officials have cited their narrow mandate and concerns that the Basel Committee was overstepping its purpose. Read more

Nuvei agrees to deal to be taken private - The Canadian payments processor has struck a deal to be bought by private-equity investor Advent International, supported by owners of Nuvei’s multiple voting shares. It is an all-cash deal that represents an enterprise value of about $6.3b. Read more

Meta to label more AI-generated posts instead of removing them - Meta is changing its policies to allow more AI-generated content to stay up on its sites, even if that content is misleading but doesn’t violate any other policies. The new policy extends to digitally created or altered images, video or audio. Read more

Ripple Labs joins stablecoin rush amid crypto market revival - Ripple Labs, the cryptocurrency group accused of selling unregistered securities, is to launch a stablecoin as a revival in the price of bitcoin draws investors back to the digital asset market. Read more

Chinese fintech Ant Group targets global growth after Jack Ma’s exit - Ant is embarking on a global expansion drive as it appears to be nearing the end of its “rectification campaign” following the overhaul of its business to satisfy regulators. The company made an unexpected bid for Credit Suisse’s Chinese securities unit in February and is working to rapidly expand its international payments business in search of growth in the post-Ma era. Read more

How a new rule could change the way advisers handle your retirement money - The Labor Department’s latest push for a new fiduciary rule would protect investors’ retirement savings and require financial services providers to change. Read more

The big trading shake-up that is about to hit fund managers - For fund and investment managers around the world, every sliver of a percentage point of return matters. That is why they need to be ready for what is known as T+1 — an imminent US, Canadian and Mexican rule change on trade processing that risks adding unwelcome costs and a drag on performance. Read more

A European fintech hub prepares to get tough on crypto companies - Lithuania expects to issue full crypto licenses by June 2025 The crypto sector ‘failed’ when lightly regulated, Krepsta says. Read more

Fidelity-backed fintech targets 30% growth, $1b revenue - Sao Paulo-based Creditas plans to issue another bond this year. Founder Sergio Furio plans a US IPO in about two years. Read more

Wirecard fugitive helped run Russian spy operations across Europe - Fugitive Wirecard COO Jan Marsalek used compromised intelligence officials in Vienna to spy on European citizens and plot break-ins and assassinations by elite Russian hit squads. He also obtained a Nato government’s cutting-edge cryptography machine and smuggled stolen senior Austrian civil servants’ phones to Moscow. Read more

Select Findings

Agora - U.S. based stablecoin platform raised $12m in Seed funding led by Dragonfly. Read more

Aidum - Colorado based mortgage technology company raised $19m in Series A funding led by PeakSpan Capital. Read more

Bavest - Germany based financial data company raised €1.1m in pre-Seed funding from investors including ReZoom Capital and Nautic Ventures. Read more

Bizplay - Seoul based expense management and business travel company raised $22.5m in Series A funding led by JB Financial Group. Read more

Brim Financial - Toronto based credit card platform and payment automation company raised $85m in Series C funding led by EDC Investments. Read more

Coadjute - London based property-based workflow automation company raised £3m in growth funding led by Lloyds Banking Group. Read more

Constantinople - Australia based banking software provider raised A$50m in Series A funding led by Prosus Ventures. Read more

Electronica Finance - India based micro and SME loans company raised $48m in Series B funding led by LeapFrog Investments. Read more

KreditBee - India based digital lending company raised $9.4m in Series D funding led by Wiseanya. Read more

LightLink - Singapore based Ethereum Layer 2 blockchain company raised $6.2m in Seed funding led by Magnolia Quality Development Corporation and T&B Media Global. Read more

Lockchain.ai - Georgia based blockchain risk management company raised $4.6m in Seed funding led by Lerer Hippeau. Read more

Merkle Trade - Singapore based decentralized trading platform raised $2.1m in Seed funding led by Hashed and Arrington Capital. Read more

Netgain - Denver based accounting software company raised $35m in growth funding led by Summit Partners. Read more

Nomoex - India based crypto trading platform raised $2m in Seed funding led by Aydton Ventures. Read more

Pigment - France based business planning company raised $145m in Series D funding led by ICONIQ Growth. Read more

PrismaStake - Australia based multi-chain staking platform raised $6m in Seed funding from investors including Binance and Bixin Ventures. Read more

Raiinmaker - Santa Monica based web3 infrastructure company raised $7.5m in Seed funding led by Jump Capital and Cypher. Read more

Scrut Automation - California based governance, risk, and compliance company raised $10m in growth funding from investors including Lightspeed Venture Partners and MassMutual Ventures. Read more

SingleInterface - Singapore based offline-to-online SaaS company raised $30m in growth funding led by Asia Partners. Read more

XION - New York based developer blockchain platform raised $25m in Series A funding from investors including Multicoin and Animoca. Read more


FinTech Collective Newsletter

Curated News with Context

Delivered every Monday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.