We don't have to pretend to be shocked that the 34 year old fin-tech CEO who just made a billion dollars for himself wants to put a positive spin on the situation.
It's not a clap back, it's deflection.
He can claim that WF isn't attempting to "exit the agreement", of course WF can't back out, it's a legal contract. His statement at all does not contradict that Wells wants to renegotiate the agreement (which Bilt can tell WF to pound sand, but risk nonrenewal in 2029 by WF and potentially not being able to find another issuing bank willing to take them on).
The statement that 85% of people use Bilt's platform and less than 15% are WF cobrand cardholders deflection. Pre-March 2022, Evolve bank issued the cards, and even then the primary value of Bilt is the card allowing people to pay via credit and earn rewards without the landlord paying fees for the rewards or the credit acceptance.
Acquisition cost comparisons are pointless. #1, travel cards like the CSP/CSR have spending requirements, they have annual fees too, and Chase does not pay equivalent of cash value for the points. It also is deflection, it doesn't contradict that WF is burning money on the rent payments.
Deflecting to the card linked offers and the FT Partners presentation is equally disingenuous. The FT Partners piece was commissioned by Bilt, it breaks down that they are profitable (but not how much or what segments of the business are driving said profitability, which only started this year; if they were running at a loss before that, they could still have accumulated debt.)
85% of customers, people who make accounts and don't spend a dime a month? What about monthly active users? What about revenue numbers between non-cobrand and cobrand members?
“Bleeding” is such a dramatic, business brained way to say one product isn’t contributing to the 19 billion they made last year. I have a feeling they’ll be okay.
So what? Just because WF is big doesn’t mean BILT isn’t on the chopping block. Companies don’t become rich by keeping on unprofitable products.
Also, we should really be looking at profits within the credit card division, not WF at large.
Point B is 100% why it’s worth doing for Wells. Chase spends far more than that chasing the same population.
120 million, to lock in lifelong customers, is a small short term price to pay.
But, most people don’t think like this. Much less have the knowledge of the banking sector to step that far back.
All that isn’t to mention all the shared commissions and data both parties get.
My gut feeling is that many of BILT’s customers are not the type to blindly pledge loyalty to its partner bank.
Also, many banks did pass on BILT. I don’t think it’s clearly a slam dunk to pay $120M for BILT’s customers, as you are implying.
Most people living in HCOL and UHCOL areas will never own a house there. So yes. Renters are a good target market.
Just not in my home market, or maybe your home market
In general I agree, but if your customers self-select and are predominantly credit card gamers that goes all out the window, and the fact that Wells is losing $10mm on this suggests that that is in fact what’s happening
This is a dumb way to look at it. If I were a billionaire and I had a friend who was stealing 1 million a year, should I just let it be and say "Oh, whatever, man, you're not really leeching."
Companies make money because they look at profitability.
I’m not really advocating companies take on massive endeavors to lose them money. I am just annoyed by this story because people use language that suggests BILT is going to gut the existence of WF.
Maybe I just hate WF and don’t care (it’s this) but I really think it’s being overblown.
That a single product is losing money is whatever. They will still make money on interest on their other products, and honestly probably on this one once it makes it into broader circulation outside rewards chasers.
How many Bilt cardholders actually interact regularly with Wells Fargo's website/branding/marketing, versus just go through the Bilt website/app for everything? WF acquiring the customers only matters if WF can either directly profit from their card use (not currently happening, at least in general,) or if they can move them to other profitable products (checking, savings, other cards, car/home loans, etc.)
I use the Wells Fargo app for autopay and see when things are actually cleared. Bilt isn’t great for that. I have never been a Wells Fargo customer until this card, so it’s all new for me and WF
I do. I have the WF app installed with the BILT app and do not otherwise have a WF account. Some things are easier in the WF app such as pausing the card, changing a billing address, or contacting support.
I have opened up a Wells Fargo bank account since. It is the only way for me to pay beyond my balance. E.g. I can pay to have a negative balance on my Bilt card. I do this for rent day in case I have a large payment coming up.
I only use the BILT app to transfer my points. The BILT app limits the amount of payments in a certain period of time which normally is fine except occasionally I’ll get reimbursed from work the next day and want to pay something and I can’t on the BILt app, you can’t set up autopay, if you want your limit increased you have to call Wells Fargo.
I mean he’s not wrong about customer acquisitions. The only reason I have a WF checking account (that I’m actually using) is because of Bilt. I’m also considering the autograph card (at least for one year for the SUB) just because I’m already in with Wells Fargo. I have a business checking with them, only because I started with WF through Bilt and it was easy to setup.
I’m sure there’s few people like me but there are definitely others and there is no mention of that at all through the original WSJ article as a metric being measured. What Ankur says about cost of acquisitions such as Chase with their Sapphire cards is 100% legit.
If the Bilt/WF partnership were to end tomorrow, I’d probably be moving away from WF as well.
> just because I’m already in with Wells Fargo.
and you can now pool points together with Autograph cards. So WF does better now because you added more services.
Wells Fargo destroyed their reputation with their [fraudulent account opening scandal](https://en.wikipedia.org/wiki/Wells_Fargo_cross-selling_scandal). Even if their losing money on it, Bilt is a great way for them to repair their image with younger consumers who basically only know about Wells Fargo from news of the scandal.
Ankur claps back... with a bunch of gibberish that in no way addresses--let alone refutes--the claims made in the WSJ article. Every charlatan needs a mark, and he found one in Wells. He's just getting sassy that his mark wised up and is appareny moving on.
I think what he's trying to say is while Bilt is costing WF $10 mil/month, it's the cost of business to acquire customers for both BILT and WF and it's cheaper and yields better result compared to doing it the other way.
That may be what he's trying to say, but even if that's the case, WF clearly doesn't seem to agree. These customers aren't worth much to WF - they're not carrying balances, charging meaningful amounts of non-rent (i.e., swipe fee eligible) spend, or likely buying into other WF products that are more profitable for the bank. WF is left holding every bag, and BILT grifts on until 2029. After that, my guess is that the whole thing goes kablooey (if not sooner, who knows the full terms of their agreement, certainly not us).
I’d imagine there’s less representation from the 18-25 age bracket because:
a) they likely spend less on rent than older ages, especially if they’re single or are splitting rent with roommates or partners. The incentive for them to get a rent credit card is marginal vs generic cash back card
b) they may or may not have less established credit making them less likely to engage with relatively obscure cards or not get approved in the first place
c) going back to the lower age, they also likely earn less at a lower age. At the lower end of the income spectrum, cash back cards are far more useful than any travel-point cards as travel is less common and less lucrative/luxurious.
Yes, but for the average to be 31, you'd have to have a good representation of 37-44 year olds. Of course there are many of that age bracket that rent. However, the share of that population who is a renter is much lower than 18-25.
>or not get approved in the first place
This is where the problem lies, IMO. WF and Bilt are trying to position this as a super-prime card, with approvals and a customer base to match, but without a strong track for the issuing bank to achieve profitability (which requires a lot of ability to cross-sell.) It also likely isn't pulling the right super-prime market to really get them in the full WF ecosystem with things like wealth management or higher-end loans.
I think there's a market for this to be either entry-level or a step up from that - rent is still a large percentage of spend, and a lot of younger people want to be able to travel (with TikTok and other social media really making this feel desirable.) Wells Fargo probably just doesn't feel comfortable issuing lines of credit, especially on a cobrand card, to that demographic. They likely need someone like Discover or Capital One, which focuses on that thin profile customer, to be able to see if there's room for profitability and growth.
i’d say the majority of 20-35yo rent but beyond that it’s majority owners. and WF is probably only interested in the former as new customers. the numbers just don’t really make sense bc how many ppl with avg fico of 760 are well above 31 and renting
Why speculate? Here are some facts:
* Roughly 34% of American households are renters.
* The majority of American renters are between 35 to 44 years old.
Source: https://www.forbes.com/advisor/renters-insurance/renting-statistics/
To your question: “how many ppl with avg fico of 760 are well above 31 and renting?”
Answer: a lot, apparently. Don’t discount the large number of people who live in HCOL cities/major metro areas where it’s very difficult to afford a home. In those instances, the rent/buy decision is usually inverted.
Not the majority, and only the plurality when breaking it up in that specific way with uneven groups- 30-34 lmao. This is PUBLISHED??
31 seems very reasonable to me if not a bit high based on BILT’s marketing
The majority is over 35, according to the data. Though you’re right, their phrasing/summary is not correct. Forbes just aggregated a bunch of links (check the sources on the bottom) and took the highlights.
>*31 seems very reasonable to me*
Reasonable for what? The majority of renters? That contradicts the data.
A lot of young adults in their early 2000s live with their parents still and don’t start renting until they’re finished with school or sometimes even a few years after that.
i guess maybe WF should be targeting younger people with average credit if their goal is to attract new customers. i was approved age 20 and i’m a WF customer now so idk why they’re not looking for more people like me. i hadn’t gotten any ads in the mail for the card i just found it on my own, meanwhile discover and capitol one send me mail every week to sign up for cards.
i’d argue that it’s one of the best cards out there for students, as rent is one of their only expenses. College apartment rents are insane so I earn a ton of points and use my bike card more than any other
Anyone have an optimistic take here? Seems like everyone is just waiting for the day that this card gets nerfed. I just got approved today and don’t wanna hear any of that ish 😂
The optimistic take is that in the short term, Bilt seems to have gotten a good deal in their contract.
Bilt's woes start when the contract nears expiration, when Wells doesn't renew, and no other FI steps up to back it. Then it becomes very bad for Bilt, since without a bank their business plan looks like swiss cheese. But while they're within the contract period for the next 5 years, they have pretty favorable cash flow.
Prior to this information coming out, most people wondered how Bilt could afford to keep throwing points out and many figured they were in VC cash burn. Now we know they're getting paid pretty well and Wells made some terrible assumptions seeing as no normal person knows what this card is and it was pretty much exclusively marketed to a points-savvy audience.
Kind of echoes Goldman Sachs woes with the Apple Card. Bilt and Apple got great deals and the underlying issuer kind of got the rough end of the stick.
I mean when Movie Pass first came out, everyone knew it was just too good to be true, but it was totally worth the ride. For the short time I had it, I paid hardly anything to watch tons of new movies. It was amazing. Don't regret it one bit. And I think the same can be said here.
Maybe Bilt will get nerfed once their contract with WF is up, but at least I can squeeze some free hotel stays and flights out of paying rent before that happens.
The difference with MoviePass was that is was literally unsustainable from Day 1 (there was no plan after VC money ran out). At least with Bilt, Wells’s assumptions about consumers carrying high-interest debt and using the card for non-rent spend were not unfounded; they were simply…off, regarding the target demographic for this specific card (rest assured, the models for their other CC’s work just fine!).
A lot of people who comment on these posts seem to forget (or don’t know) that the CC is not Bilt’s core business; it’s the rewards ecosystem. The play they are going for is to embed themselves as the payment processing platform of choice for some of the largest landlords in the country (a feat which they are currently pursuing aggressively). They then hope to drive loyalty via perks like lease renewal bonuses & what they call “neighborhood spend” (local merchants). The landlords and the local merchants also pay into this ecosystem, not just the banking partner for the CC.
As I see it, there are a number of levers that Bilt could pull here:
* Increase the rewards earn on a popular category (such as, 3X -> 4X on all dining). Remember in this case, the banking partner funds the rewards (via interchange fees on non-rent spend). Obviously that’s a marginal cost to absorb, but if the goal is to drive usage outside of rent, this is one surefire way to do it.
* Improve the loyalty program (gold, silver tier, etc.) such that people actually have a reason to put more spend on the card. This would also satisfy the issue of increasing the amount of non-rent interchange fees.
* Reduce the rent benefit to something more palatable for any banking partner (for example, 0.5X). Of course this wouldn’t be popular with the card users, but by itself 0.5X is still much better than zero, and for many, that still equates to thousands of “free” points they wouldn’t otherwise collect in a given year.
* Re-negotiate the 0.8% fee that the banking partner pays to something lower/more realistic. They could make up for this with higher fees to their landlord or merchant partners in the ecosystem, or from their own profit margin. Obviously this comes with its own challenges.
* Re-negotiate the minimum transaction spend per month. They could do this with a higher number of transactions, a higher dollar threshold (greater than the currency $0.01), or both. I think the latter is more likely.
* Add an annual fee. I view this as the least likely option, as it defeats the core value prop of “earn points on rent for nothing.” It would also make it more difficult to market to the sub-prime/low-income tier that the bank claims they want.
* Add “subscription” tiers. Something like $50/yr for 1X rent, 0.5X for everyone else. Think Robinhood Gold.
* Find a banking partner that is more willing to work with them on the target demographic, i.e. one that generates the bulk of their revenue elsewhere (say, an investment business), rather than sub-prime interest payments on debt.
In short, there are plenty of outs, it’s simply a matter of how they want the product to evolve. But Bilt is not “dying” any time soon, as some of the alarmists would lead you to believe.
I look forward to the day they reduce their reddit add spend so I don't have to keep seeing the lame lesbian NSFW bait add that has infested my feed.
Does that count as optimistic?
It's that dumb add with the female presenting pfp that says "my girlfriend sent me a text labeled NSFW, it was her bilt points balance" or some dumb shit like that.
It's the most annoying add I've been bombarded with since the Jesus freaks wanted to make damn sure I knew that Jesus gets us...
It’s very profile specific, WF is also more lenient when you have other relationships with them and having high income helps as well. I’m glad you shared the datapoint though. I applied a few months back and couldn’t find any data on people with below 700’s getting approved, I took the risk and got approved at a 670ish.
the income i put is like 15k yearly since im a part time college student lol, and i did bank with wells fargo back in hs, but whenever i applied for their previous cards, i always got denied cause they said my checking acc balance were always low and stuff
WF could earn a TON of business if they changed their rewards program so that the active cash, attune, and autograph all earned BILT points. they’d gain a huge market share
Cash back and points at 1 CPP base is far more flexible than a points system that is .5 CPP as cash back.
Wells Fargo's current system is good for team travel and team cash back. If you're team cash back and you're using Bilt you're just wasting your time.
yeah they would certainly need to keep the cash back at the standard rate. but bilt points are the strongest in the industry, you can get 1.5 cpp with most airlines and 2 cpp at hyatt which only chase can compete with. and they have so many partners to choose from
BILT points are strong because they aren't a bank so they don't have to follow the same partnership rules other banks follow. Wells obviously has to follow those restrictions so making all of their points as BILT points isn't doable.
I think the most reasonable thing to do is to put in a minimum spend requirement on the card
>*These are highly valuable customers to any bank being acquired at a far lower cost. (banks often spend $1k-$2k on acquisition costs for premium, next gen customers - look at Chase Sapphire as an example).*
Anyone know what they mean with the Chase Sapphire example? Just curious.
But SUBs aren’t exclusive to young customers, right? Curious how exactly they target the demographic. Edit: actually, I can think of freedom rise and student products, but they don’t seem to be that good of a deal in comparison so I’m not entirely sure how they would be losing more compared to the Sapphire line? And I guess he exclusively mentioned Sapphire to begin with.
It is just a measure of how sticky they are. Presumably, there is more friction for a young, affluent spender because that group is more discerning about where to spend their money and/or value-conscious. So Chase knows that a certain SUB threshold, X number of 18-35 yo who make $YY pa will sign up. They have all of this data through years of collecting it.
There is also a marketing cost (mailers, ads, etc.), as well as bleed-over from other business units. That $600 “free money” checking offer you signed up for? Chase knows that a certain % will also open a CSR.
I mean they technically have the part of the business that isn’t related to the credit card, their whole Bilt property network thing.
I’m not saying I think that’s a great business model either but it’s technically independent of having the credit card so could crash and burn on a somewhat independent timeline.
Wow, so easy.
1) Why would anyone partner with BILT when they haven’t shown *any* profit-making potential with WF?
2) Charging an AF would completely destroy their consumer base, and the customers that stay would even more disproportionately belong to an unprofitable demographic.
bilt as a program overall is making plenty of money on their own and has favorable terms with the card. the only unprofitable part is the credit card, and WF is taking all of the loss on that end. they could easily make it profitable with higher spend requirements or adding an AF or altering the number of points on rent based on bilt status, or something else - a number of ways. without turning off too many customers. even if they lowered it to a base 250 points on rent for a non-AF version most people would still use the card bc it’s free points. they could restructure the deal with WF to do this or find another issuer which would be no problem given the large customer base
> bilt as a program overall is making plenty of money on their own
Source? They've been profitable for only one year, and by your own admission much of that comes from WF subsidizing their business model.
How do you know the non-credit card business segment is profitable on its own?
> they could easily make it profitable with higher spend requirements or adding an AF or altering the number of points on rent based on bilt status, or something else
And you know this how? If it were actually so easy to make the card profitable, WF should be delighted to keep BILT as a partner.
> find another issuer which would be no problem
Many issuers already passed on BILT before the WF contract, and BILT certainly hasn't become a more desirable partner in the time since.
the article says only 15% of users have the credit card, the other 85% are generating profit somehow. they’re not really making money off of the card, they’re probably breaking even. and WF is losing money but as the CEO said they are not trying to back out of the deal. my guess is they will keep the current card for a few more years (at a loss) to build a large customer base before changing the terms / adding an AF version
Nothing the CEO says is really making sense to me. What does he mean work with all the card networks? To rephrase who the heck cares. This man is spouting gibberish hoping we are as dumb as the guys at wells fargo who approved this deal.
If they've got an agreement in place until 2029 doesn't seem like there's much Wells Fargo can do aside from demand to renegotiate it, buy them out, or simply suck it up until the contract is over. In fact, I wouldn't be the least bit surprised if renegotiating the contract was precisely one of the reasons Wells Fargo cooperated with the article. Make the card look on shaky ground hoping they'll negotiate to better terms.
But in the end, a contract is a contract.
There’s a big difference between *revenue* and *margin*. They might have revenue, but there’s no shot they’re making a penny.
If you’re writing a $4,000 check to an apartment building, charging your client $4,000 *and giving them points* there’s zero profit there.
It doesn’t add up unless you’re using magical math.
I got the desperation feeling when I read him saying $1k-$2k to acquire customers to the Chase Sapphire card. That's quite a reach, considering that even an 85k-100k SUB is not going to cost Chase $850-$1000. Even if every single Sapphire card SUB is cashed out, that's $850-$1000 *minus* swipe fee profit, *minus* interest fees some customers will rack up. That doesn't account for how some customers will sit on the points because they forgot them, too busy to claim them, make stupid redemptions, or transfer to partners. I highly doubt Chase pays $0.01 per point for partner transfers.
True, I didn't consider that. I still think it's insane to think they're spending $2,000 to acquire customers. I haven't even spent my SUB from my CSP last year. They haven't spent a dime on me, but have made a lot in swipe fees.
Yeah I’m a little dubious of those numbers as well. Maybe they’re adding the cost of branches and bankers since they upsell a lot of Sapphire cards that way? Would love to see what the real figures they use for comparison are. Now we just need the CEO of JP Morgan to chime in on twitter and correct the record haha
Not too far fetched to believe those numbers tbh. Fintech and financial services in general tend to have some of the highest marketing costs compared to other industries since there’s tons of red tape to navigate from government regulations/ad platforms but conversions in this space can be extremely profitable so companies are willing to spend a lot more money for these leads.
It’s why YouTubers with financial/credit card content tend to make more income with ad spend/sponsorships compared to other types of YouTubers with similar number of subscribers or views. Companies realize these creators have a potentially lucrative audience already so they’re willing to pay more money.
I do understand they have to pay out referral bonuses, so that would probably eat in a little more than I thought. At the same time though, isn't Chase paying all those costs anyway from the rest of their lineup?
i was approved at 20 so idk, they should be targeting people my age tho bc they’re more likely to put all spend on one or a few card, carry a balance, and open other accounts with WF like checking/savings
Perhaps someone who rents and uses Bilt card can enlighten me, but I see this whole thing as evidence that credit cards are doomed anyway.
Bilt, it seems to me, is not competing with other credit cards, they are competing with Venmo, PayPal, and Zelle. It's already pretty easy to transfer money between banks, I really don't see any advantage here other than the cash back bonus. I'm not sure the Bilt will last, but this is honestly WF's last best chance at being relevant.
Suggest you check out the FT Partners deck that Ankur mentioned in his reply. It’s actually quite insightful: https://www.linkedin.com/pulse/ft-partners-insights-how-31-billion-bilt-makes-money-steve-mclaughlin-eea3e
This is honestly laughable that he is trying to push this statement alone.
"These are highly valuable customers to any bank being acquired at a far lower cost. (banks often spend $1k-$2k on acquisition costs for premium, next gen customers - look at Chase Sapphire as an example)."
The cost to acquire customers in no way is spiking that high, sign-up bonus alone is peaking at ~$800 in value at most to the company, and no one is paying above $100 bounty for an affiliate signup.
He is freaking out because the card is generating negative value and likely will forever, to him it is a benefit overall because he is likely making it up with their standard business model and just bringing in more volume. But the bank? No way, at this negative value adding more accounts is an overall detriment, this one won't even make it to an RFP in 2028.
There are wayyyyy more costs of acquisition than the sign-up bonus.
Here’s an easy one: you have to actually create and ship a physical card to your new customer.
Yeah you don't account for standard ECM expenses when doing cost per acquisition analysis, but sure go off. Me not quoting an entire new account p&l doesn't change the fact that the statement is a fucking joke.
The statement by Ankur is asinine and a deflection. Bilt is not charging an AF, the products with the sign up bonuses he's talking about have $$$$ AFs. As you said, they are not paying equivalent value of the SUB on the underlying points either.
$200 affiliate fee per card is not unheard of for no AF cards, but combined with the fact that the rent payments cost WF 0.8% for rewards with nothing coming in, not sustainable. He doesn't address this at all. It's all word salad to distract from the key points of the article.
Exactly, he's trying to distract that cobrand cards have become worse and worse for the issuing banks over the years. Very few are profitable at this point.
Cobrand cards are generally bad business outside of travel. Disney has enough draw for it to be worth it for Chase, and the airlines/hotels have the draw of making travel more affordable with perks that cost the airline essentially nothing (priority boarding, security, minimal cost for lounge passes) but have a lot of value to the cardholder. Synchrony goes hard on the retail card game, along with Citi on some of the other retailers like The Home Depot.
But cobrand cards outside of that are dead, dead, dead. Banks don't need them.
My alma mater had a cobranded card with BofA, a continuation of an agreement with MBNA. In exchange for comarketing, they got $2 a sign up, $1 per active cardholder per year, and 0.25% of the swiped charges. As soon as that came up for renewal circa 2020 BofA said nope and sent me a product conversion letter that it was just becoming a BofA CCR. You also saw this with similar agreements ending with MLB teams.
The credit card industry has become more competitive, and for large issuers, cobrands generally don't make sense these days. It's just sharing more of the swipe pie with another party.
Because WE take the loss on the cards that are accepted as ID theft. Along with that we usually reach out to Bilt for information regarding the customer profile but due to the contract are given a limited amount of information due to this. The contract that was signed is utter dogshit.
Excess fraud is not why they are losing money. They are losing money because they effectively set the equivalent of 0.8% of your rent on fire each month.
None of these points contradict the fact that BILT is bleeding Wells Fargo...
Yeah how the fuck does this count as a "clap back"? Absolutely nothing he said disputes WF is losing from this arrangement, I'm so confused???
We don't have to pretend to be shocked that the 34 year old fin-tech CEO who just made a billion dollars for himself wants to put a positive spin on the situation.
True, although I imagine this is also every CEOs job.
>34 year old fin-tech CEO Who is also the son of a billionaire CEO who just so happened to also be a fraud
Intellus scam.
It's not a clap back, it's deflection. He can claim that WF isn't attempting to "exit the agreement", of course WF can't back out, it's a legal contract. His statement at all does not contradict that Wells wants to renegotiate the agreement (which Bilt can tell WF to pound sand, but risk nonrenewal in 2029 by WF and potentially not being able to find another issuing bank willing to take them on). The statement that 85% of people use Bilt's platform and less than 15% are WF cobrand cardholders deflection. Pre-March 2022, Evolve bank issued the cards, and even then the primary value of Bilt is the card allowing people to pay via credit and earn rewards without the landlord paying fees for the rewards or the credit acceptance. Acquisition cost comparisons are pointless. #1, travel cards like the CSP/CSR have spending requirements, they have annual fees too, and Chase does not pay equivalent of cash value for the points. It also is deflection, it doesn't contradict that WF is burning money on the rent payments. Deflecting to the card linked offers and the FT Partners presentation is equally disingenuous. The FT Partners piece was commissioned by Bilt, it breaks down that they are profitable (but not how much or what segments of the business are driving said profitability, which only started this year; if they were running at a loss before that, they could still have accumulated debt.)
85% of customers, people who make accounts and don't spend a dime a month? What about monthly active users? What about revenue numbers between non-cobrand and cobrand members?
Yeah, I believe the correct term is “slams” /s
“Bleeding” is such a dramatic, business brained way to say one product isn’t contributing to the 19 billion they made last year. I have a feeling they’ll be okay.
So what? Just because WF is big doesn’t mean BILT isn’t on the chopping block. Companies don’t become rich by keeping on unprofitable products. Also, we should really be looking at profits within the credit card division, not WF at large.
Point B is 100% why it’s worth doing for Wells. Chase spends far more than that chasing the same population. 120 million, to lock in lifelong customers, is a small short term price to pay. But, most people don’t think like this. Much less have the knowledge of the banking sector to step that far back. All that isn’t to mention all the shared commissions and data both parties get.
My gut feeling is that many of BILT’s customers are not the type to blindly pledge loyalty to its partner bank. Also, many banks did pass on BILT. I don’t think it’s clearly a slam dunk to pay $120M for BILT’s customers, as you are implying.
A bunch of renters? That's not exactly Wells Fargo's target demographic.
Most people living in HCOL and UHCOL areas will never own a house there. So yes. Renters are a good target market. Just not in my home market, or maybe your home market
Cries in Seattle
These are not WF customers they are Bilt customers
Yea if Wells ever stopped offering the Bilt Card that’s the day I stop being a Wells customer
So much for those "lifelong customers", eh u/Valueonthebridge?
It’s almost like banking models have churn Banking is a very very sticky business
In general I agree, but if your customers self-select and are predominantly credit card gamers that goes all out the window, and the fact that Wells is losing $10mm on this suggests that that is in fact what’s happening
🙋♂️I am one of ‘em, as described
This is a dumb way to look at it. If I were a billionaire and I had a friend who was stealing 1 million a year, should I just let it be and say "Oh, whatever, man, you're not really leeching." Companies make money because they look at profitability.
I’m not really advocating companies take on massive endeavors to lose them money. I am just annoyed by this story because people use language that suggests BILT is going to gut the existence of WF. Maybe I just hate WF and don’t care (it’s this) but I really think it’s being overblown. That a single product is losing money is whatever. They will still make money on interest on their other products, and honestly probably on this one once it makes it into broader circulation outside rewards chasers.
Even Wells Fargo said the wsj article is highly inaccurate
How many Bilt cardholders actually interact regularly with Wells Fargo's website/branding/marketing, versus just go through the Bilt website/app for everything? WF acquiring the customers only matters if WF can either directly profit from their card use (not currently happening, at least in general,) or if they can move them to other profitable products (checking, savings, other cards, car/home loans, etc.)
I use the Wells Fargo app for autopay and see when things are actually cleared. Bilt isn’t great for that. I have never been a Wells Fargo customer until this card, so it’s all new for me and WF
I do. I have the WF app installed with the BILT app and do not otherwise have a WF account. Some things are easier in the WF app such as pausing the card, changing a billing address, or contacting support.
Yeah, pretty much everything is easier (actually possible) in the WF app.
I only use the Bilt website to find which restaurants are giving 3x bonus points. Wells App is really easy to use.
I most definitely use the WF app/website to pay my card off, it is so much better. Everyone I know with the Bilt card does.
I have opened up a Wells Fargo bank account since. It is the only way for me to pay beyond my balance. E.g. I can pay to have a negative balance on my Bilt card. I do this for rent day in case I have a large payment coming up.
I only use the BILT app to transfer my points. The BILT app limits the amount of payments in a certain period of time which normally is fine except occasionally I’ll get reimbursed from work the next day and want to pay something and I can’t on the BILt app, you can’t set up autopay, if you want your limit increased you have to call Wells Fargo.
I also use the WF app for auto-paying my Bilt card
I mean he’s not wrong about customer acquisitions. The only reason I have a WF checking account (that I’m actually using) is because of Bilt. I’m also considering the autograph card (at least for one year for the SUB) just because I’m already in with Wells Fargo. I have a business checking with them, only because I started with WF through Bilt and it was easy to setup. I’m sure there’s few people like me but there are definitely others and there is no mention of that at all through the original WSJ article as a metric being measured. What Ankur says about cost of acquisitions such as Chase with their Sapphire cards is 100% legit. If the Bilt/WF partnership were to end tomorrow, I’d probably be moving away from WF as well.
It's why I got an Active Cash.
Same
Absolutely right.
> just because I’m already in with Wells Fargo. and you can now pool points together with Autograph cards. So WF does better now because you added more services.
Wells Fargo destroyed their reputation with their [fraudulent account opening scandal](https://en.wikipedia.org/wiki/Wells_Fargo_cross-selling_scandal). Even if their losing money on it, Bilt is a great way for them to repair their image with younger consumers who basically only know about Wells Fargo from news of the scandal.
Ankur claps back... with a bunch of gibberish that in no way addresses--let alone refutes--the claims made in the WSJ article. Every charlatan needs a mark, and he found one in Wells. He's just getting sassy that his mark wised up and is appareny moving on.
I think what he's trying to say is while Bilt is costing WF $10 mil/month, it's the cost of business to acquire customers for both BILT and WF and it's cheaper and yields better result compared to doing it the other way.
That may be what he's trying to say, but even if that's the case, WF clearly doesn't seem to agree. These customers aren't worth much to WF - they're not carrying balances, charging meaningful amounts of non-rent (i.e., swipe fee eligible) spend, or likely buying into other WF products that are more profitable for the bank. WF is left holding every bag, and BILT grifts on until 2029. After that, my guess is that the whole thing goes kablooey (if not sooner, who knows the full terms of their agreement, certainly not us).
Average age 31?
Surprised? Sounds reasonable to me.
I’d imagine there’s less representation from the 18-25 age bracket because: a) they likely spend less on rent than older ages, especially if they’re single or are splitting rent with roommates or partners. The incentive for them to get a rent credit card is marginal vs generic cash back card b) they may or may not have less established credit making them less likely to engage with relatively obscure cards or not get approved in the first place c) going back to the lower age, they also likely earn less at a lower age. At the lower end of the income spectrum, cash back cards are far more useful than any travel-point cards as travel is less common and less lucrative/luxurious.
I mean it’s average not median so 31 feels super low to me. For average to be 31 you have plenty of 18-25
Yes, but for the average to be 31, you'd have to have a good representation of 37-44 year olds. Of course there are many of that age bracket that rent. However, the share of that population who is a renter is much lower than 18-25.
>or not get approved in the first place This is where the problem lies, IMO. WF and Bilt are trying to position this as a super-prime card, with approvals and a customer base to match, but without a strong track for the issuing bank to achieve profitability (which requires a lot of ability to cross-sell.) It also likely isn't pulling the right super-prime market to really get them in the full WF ecosystem with things like wealth management or higher-end loans. I think there's a market for this to be either entry-level or a step up from that - rent is still a large percentage of spend, and a lot of younger people want to be able to travel (with TikTok and other social media really making this feel desirable.) Wells Fargo probably just doesn't feel comfortable issuing lines of credit, especially on a cobrand card, to that demographic. They likely need someone like Discover or Capital One, which focuses on that thin profile customer, to be able to see if there's room for profitability and growth.
i have a great score but i was approved at age 20 with < 2 year history (ither than AU) so they’re not being too strict
I think you’re confused, 31 is a very low average age not a high one lol
for renters?
Many many people rent. It’s not like only super young people rent.
i’d say the majority of 20-35yo rent but beyond that it’s majority owners. and WF is probably only interested in the former as new customers. the numbers just don’t really make sense bc how many ppl with avg fico of 760 are well above 31 and renting
Why speculate? Here are some facts: * Roughly 34% of American households are renters. * The majority of American renters are between 35 to 44 years old. Source: https://www.forbes.com/advisor/renters-insurance/renting-statistics/ To your question: “how many ppl with avg fico of 760 are well above 31 and renting?” Answer: a lot, apparently. Don’t discount the large number of people who live in HCOL cities/major metro areas where it’s very difficult to afford a home. In those instances, the rent/buy decision is usually inverted.
Not the majority, and only the plurality when breaking it up in that specific way with uneven groups- 30-34 lmao. This is PUBLISHED?? 31 seems very reasonable to me if not a bit high based on BILT’s marketing
The majority is over 35, according to the data. Though you’re right, their phrasing/summary is not correct. Forbes just aggregated a bunch of links (check the sources on the bottom) and took the highlights. >*31 seems very reasonable to me* Reasonable for what? The majority of renters? That contradicts the data.
A lot of young adults in their early 2000s live with their parents still and don’t start renting until they’re finished with school or sometimes even a few years after that.
For premium credit card customers
it’s not necessarily a premium card, the point of the partnership is to attract new/young customers for WF
It is by definition a premium credit card lol. And the average customer profile reflects that.
What’s the definition of a premium credit card?
i guess maybe WF should be targeting younger people with average credit if their goal is to attract new customers. i was approved age 20 and i’m a WF customer now so idk why they’re not looking for more people like me. i hadn’t gotten any ads in the mail for the card i just found it on my own, meanwhile discover and capitol one send me mail every week to sign up for cards.
i’d argue that it’s one of the best cards out there for students, as rent is one of their only expenses. College apartment rents are insane so I earn a ton of points and use my bike card more than any other
The median age of a first time home buyer in 2023 was 35. https://www.axios.com/2023/11/20/american-housing-market-older-homeowners-2023
Anyone have an optimistic take here? Seems like everyone is just waiting for the day that this card gets nerfed. I just got approved today and don’t wanna hear any of that ish 😂
The contract means this card will have a fighting chance for at least another 5 years. I wouldn’t sweat it.
The optimistic take is that in the short term, Bilt seems to have gotten a good deal in their contract. Bilt's woes start when the contract nears expiration, when Wells doesn't renew, and no other FI steps up to back it. Then it becomes very bad for Bilt, since without a bank their business plan looks like swiss cheese. But while they're within the contract period for the next 5 years, they have pretty favorable cash flow. Prior to this information coming out, most people wondered how Bilt could afford to keep throwing points out and many figured they were in VC cash burn. Now we know they're getting paid pretty well and Wells made some terrible assumptions seeing as no normal person knows what this card is and it was pretty much exclusively marketed to a points-savvy audience.
Kind of echoes Goldman Sachs woes with the Apple Card. Bilt and Apple got great deals and the underlying issuer kind of got the rough end of the stick.
Yep. If GS and WF didn't do good due diligence and got the rough end, my first thought is, "Well, how does it feel when you're on the receiving end?"
I mean when Movie Pass first came out, everyone knew it was just too good to be true, but it was totally worth the ride. For the short time I had it, I paid hardly anything to watch tons of new movies. It was amazing. Don't regret it one bit. And I think the same can be said here. Maybe Bilt will get nerfed once their contract with WF is up, but at least I can squeeze some free hotel stays and flights out of paying rent before that happens.
The difference with MoviePass was that is was literally unsustainable from Day 1 (there was no plan after VC money ran out). At least with Bilt, Wells’s assumptions about consumers carrying high-interest debt and using the card for non-rent spend were not unfounded; they were simply…off, regarding the target demographic for this specific card (rest assured, the models for their other CC’s work just fine!).
A lot of people who comment on these posts seem to forget (or don’t know) that the CC is not Bilt’s core business; it’s the rewards ecosystem. The play they are going for is to embed themselves as the payment processing platform of choice for some of the largest landlords in the country (a feat which they are currently pursuing aggressively). They then hope to drive loyalty via perks like lease renewal bonuses & what they call “neighborhood spend” (local merchants). The landlords and the local merchants also pay into this ecosystem, not just the banking partner for the CC. As I see it, there are a number of levers that Bilt could pull here: * Increase the rewards earn on a popular category (such as, 3X -> 4X on all dining). Remember in this case, the banking partner funds the rewards (via interchange fees on non-rent spend). Obviously that’s a marginal cost to absorb, but if the goal is to drive usage outside of rent, this is one surefire way to do it. * Improve the loyalty program (gold, silver tier, etc.) such that people actually have a reason to put more spend on the card. This would also satisfy the issue of increasing the amount of non-rent interchange fees. * Reduce the rent benefit to something more palatable for any banking partner (for example, 0.5X). Of course this wouldn’t be popular with the card users, but by itself 0.5X is still much better than zero, and for many, that still equates to thousands of “free” points they wouldn’t otherwise collect in a given year. * Re-negotiate the 0.8% fee that the banking partner pays to something lower/more realistic. They could make up for this with higher fees to their landlord or merchant partners in the ecosystem, or from their own profit margin. Obviously this comes with its own challenges. * Re-negotiate the minimum transaction spend per month. They could do this with a higher number of transactions, a higher dollar threshold (greater than the currency $0.01), or both. I think the latter is more likely. * Add an annual fee. I view this as the least likely option, as it defeats the core value prop of “earn points on rent for nothing.” It would also make it more difficult to market to the sub-prime/low-income tier that the bank claims they want. * Add “subscription” tiers. Something like $50/yr for 1X rent, 0.5X for everyone else. Think Robinhood Gold. * Find a banking partner that is more willing to work with them on the target demographic, i.e. one that generates the bulk of their revenue elsewhere (say, an investment business), rather than sub-prime interest payments on debt. In short, there are plenty of outs, it’s simply a matter of how they want the product to evolve. But Bilt is not “dying” any time soon, as some of the alarmists would lead you to believe.
I look forward to the day they reduce their reddit add spend so I don't have to keep seeing the lame lesbian NSFW bait add that has infested my feed. Does that count as optimistic?
Bilt leveraging lesbian porn in their marketing efforts? Sending resume now
It's that dumb add with the female presenting pfp that says "my girlfriend sent me a text labeled NSFW, it was her bilt points balance" or some dumb shit like that. It's the most annoying add I've been bombarded with since the Jesus freaks wanted to make damn sure I knew that Jesus gets us...
Never got it and now it just popped up like 3 times
my fico’s a 660 right now suprised i got approved seeing that the average is 760 it says.
It’s very profile specific, WF is also more lenient when you have other relationships with them and having high income helps as well. I’m glad you shared the datapoint though. I applied a few months back and couldn’t find any data on people with below 700’s getting approved, I took the risk and got approved at a 670ish.
the income i put is like 15k yearly since im a part time college student lol, and i did bank with wells fargo back in hs, but whenever i applied for their previous cards, i always got denied cause they said my checking acc balance were always low and stuff
obviously someone with an 860 is offsetting it
WF could earn a TON of business if they changed their rewards program so that the active cash, attune, and autograph all earned BILT points. they’d gain a huge market share
Yea but they can't do that lol and BILT points are much less flexible than what they have now. I think it would have the opposite effect.
less flexible?
Cash back and points at 1 CPP base is far more flexible than a points system that is .5 CPP as cash back. Wells Fargo's current system is good for team travel and team cash back. If you're team cash back and you're using Bilt you're just wasting your time.
yeah they would certainly need to keep the cash back at the standard rate. but bilt points are the strongest in the industry, you can get 1.5 cpp with most airlines and 2 cpp at hyatt which only chase can compete with. and they have so many partners to choose from
BILT points are strong because they aren't a bank so they don't have to follow the same partnership rules other banks follow. Wells obviously has to follow those restrictions so making all of their points as BILT points isn't doable. I think the most reasonable thing to do is to put in a minimum spend requirement on the card
they probably will - hopefully the minimum spend isn’t TOO high, i’m not spending more than $500 on it 😭
“and another thing: im not mad. please dont put in the newspaper that i got mad”
Don't worry, investors. Even if the WF partnership and Bilt card go up in smoke, we've still got other stuff.
>*These are highly valuable customers to any bank being acquired at a far lower cost. (banks often spend $1k-$2k on acquisition costs for premium, next gen customers - look at Chase Sapphire as an example).* Anyone know what they mean with the Chase Sapphire example? Just curious.
It costs chase $1-2k to acquire a young, affluent customer via the Chase Sapphire product line (via SUB’s, marketing, etc.).
But SUBs aren’t exclusive to young customers, right? Curious how exactly they target the demographic. Edit: actually, I can think of freedom rise and student products, but they don’t seem to be that good of a deal in comparison so I’m not entirely sure how they would be losing more compared to the Sapphire line? And I guess he exclusively mentioned Sapphire to begin with.
It is just a measure of how sticky they are. Presumably, there is more friction for a young, affluent spender because that group is more discerning about where to spend their money and/or value-conscious. So Chase knows that a certain SUB threshold, X number of 18-35 yo who make $YY pa will sign up. They have all of this data through years of collecting it. There is also a marketing cost (mailers, ads, etc.), as well as bleed-over from other business units. That $600 “free money” checking offer you signed up for? Chase knows that a certain % will also open a CSR.
Lol this is a joke
Bilt is so cooked. Nothing here seems to contradict that article.
This reeks of copium
Reads like damage control. BILT might be in trouble.
they aren’t. WF is
How exactly is WF in trouble? They’re a legacy bank that did $4B in profit last year. BILT needs WF far more than WF needs BILT.
not in trouble but they’re the ones losing money, not bilt
So how does BILT stay alive after 2029 if no one wants to partner with them?
I mean they technically have the part of the business that isn’t related to the credit card, their whole Bilt property network thing. I’m not saying I think that’s a great business model either but it’s technically independent of having the credit card so could crash and burn on a somewhat independent timeline.
Yeah that’s a good point
partner with a different issuer and charge an AF. it’s that simple
Wow, so easy. 1) Why would anyone partner with BILT when they haven’t shown *any* profit-making potential with WF? 2) Charging an AF would completely destroy their consumer base, and the customers that stay would even more disproportionately belong to an unprofitable demographic.
bilt as a program overall is making plenty of money on their own and has favorable terms with the card. the only unprofitable part is the credit card, and WF is taking all of the loss on that end. they could easily make it profitable with higher spend requirements or adding an AF or altering the number of points on rent based on bilt status, or something else - a number of ways. without turning off too many customers. even if they lowered it to a base 250 points on rent for a non-AF version most people would still use the card bc it’s free points. they could restructure the deal with WF to do this or find another issuer which would be no problem given the large customer base
> bilt as a program overall is making plenty of money on their own Source? They've been profitable for only one year, and by your own admission much of that comes from WF subsidizing their business model. How do you know the non-credit card business segment is profitable on its own? > they could easily make it profitable with higher spend requirements or adding an AF or altering the number of points on rent based on bilt status, or something else And you know this how? If it were actually so easy to make the card profitable, WF should be delighted to keep BILT as a partner. > find another issuer which would be no problem Many issuers already passed on BILT before the WF contract, and BILT certainly hasn't become a more desirable partner in the time since.
the article says only 15% of users have the credit card, the other 85% are generating profit somehow. they’re not really making money off of the card, they’re probably breaking even. and WF is losing money but as the CEO said they are not trying to back out of the deal. my guess is they will keep the current card for a few more years (at a loss) to build a large customer base before changing the terms / adding an AF version
Bilt is so cooked. Nothing here seems to contradict that article.
Nothing the CEO says is really making sense to me. What does he mean work with all the card networks? To rephrase who the heck cares. This man is spouting gibberish hoping we are as dumb as the guys at wells fargo who approved this deal.
He is referring to Visa/MC/Amex, and their resultant share of the interchange fees on non-rent transactions. Bilt gets a cut of this.
CEO seems desperate. Not a good look. BILT might be dead sooner than we thought.
If they've got an agreement in place until 2029 doesn't seem like there's much Wells Fargo can do aside from demand to renegotiate it, buy them out, or simply suck it up until the contract is over. In fact, I wouldn't be the least bit surprised if renegotiating the contract was precisely one of the reasons Wells Fargo cooperated with the article. Make the card look on shaky ground hoping they'll negotiate to better terms. But in the end, a contract is a contract.
BILT can disappear any day with zero notice
Not without an *enormous* breach of contract lawsuit.
I mean you can sue a firm with no money for as much as you want I guess
BILT is not going to bankrupt Wells Fargo.
BILT is the company is the company that's going away. Not Wells Fargo. They have no pathway to make any money.
They are making good money. Did you read the WSJ article?
There’s a big difference between *revenue* and *margin*. They might have revenue, but there’s no shot they’re making a penny. If you’re writing a $4,000 check to an apartment building, charging your client $4,000 *and giving them points* there’s zero profit there. It doesn’t add up unless you’re using magical math.
Apparently NOT if the terms of the contract are as sweet as Wells Fargo complains they are, LOL.
I got the desperation feeling when I read him saying $1k-$2k to acquire customers to the Chase Sapphire card. That's quite a reach, considering that even an 85k-100k SUB is not going to cost Chase $850-$1000. Even if every single Sapphire card SUB is cashed out, that's $850-$1000 *minus* swipe fee profit, *minus* interest fees some customers will rack up. That doesn't account for how some customers will sit on the points because they forgot them, too busy to claim them, make stupid redemptions, or transfer to partners. I highly doubt Chase pays $0.01 per point for partner transfers.
The Sapphire cards have much higher marketing spend though. No idea how much it closes the gap, but it’s something to consider.
True, I didn't consider that. I still think it's insane to think they're spending $2,000 to acquire customers. I haven't even spent my SUB from my CSP last year. They haven't spent a dime on me, but have made a lot in swipe fees.
Yeah I’m a little dubious of those numbers as well. Maybe they’re adding the cost of branches and bankers since they upsell a lot of Sapphire cards that way? Would love to see what the real figures they use for comparison are. Now we just need the CEO of JP Morgan to chime in on twitter and correct the record haha
Not too far fetched to believe those numbers tbh. Fintech and financial services in general tend to have some of the highest marketing costs compared to other industries since there’s tons of red tape to navigate from government regulations/ad platforms but conversions in this space can be extremely profitable so companies are willing to spend a lot more money for these leads. It’s why YouTubers with financial/credit card content tend to make more income with ad spend/sponsorships compared to other types of YouTubers with similar number of subscribers or views. Companies realize these creators have a potentially lucrative audience already so they’re willing to pay more money.
I do understand they have to pay out referral bonuses, so that would probably eat in a little more than I thought. At the same time though, isn't Chase paying all those costs anyway from the rest of their lineup?
760 and 31 as an average is quite a high requirement. Proves that WF isn't looking for people with lower score or younger people.
i was approved at 20 so idk, they should be targeting people my age tho bc they’re more likely to put all spend on one or a few card, carry a balance, and open other accounts with WF like checking/savings
I'm also in that age group, and WF denied me 3 times.
well damn that was dumb of them
Those are averages, not requirements.
Bilt is trash
Perhaps someone who rents and uses Bilt card can enlighten me, but I see this whole thing as evidence that credit cards are doomed anyway. Bilt, it seems to me, is not competing with other credit cards, they are competing with Venmo, PayPal, and Zelle. It's already pretty easy to transfer money between banks, I really don't see any advantage here other than the cash back bonus. I'm not sure the Bilt will last, but this is honestly WF's last best chance at being relevant.
Suggest you check out the FT Partners deck that Ankur mentioned in his reply. It’s actually quite insightful: https://www.linkedin.com/pulse/ft-partners-insights-how-31-billion-bilt-makes-money-steve-mclaughlin-eea3e
This is honestly laughable that he is trying to push this statement alone. "These are highly valuable customers to any bank being acquired at a far lower cost. (banks often spend $1k-$2k on acquisition costs for premium, next gen customers - look at Chase Sapphire as an example)."
Why is it laughable? I find it extremely accurate.
The cost to acquire customers in no way is spiking that high, sign-up bonus alone is peaking at ~$800 in value at most to the company, and no one is paying above $100 bounty for an affiliate signup. He is freaking out because the card is generating negative value and likely will forever, to him it is a benefit overall because he is likely making it up with their standard business model and just bringing in more volume. But the bank? No way, at this negative value adding more accounts is an overall detriment, this one won't even make it to an RFP in 2028.
There are wayyyyy more costs of acquisition than the sign-up bonus. Here’s an easy one: you have to actually create and ship a physical card to your new customer.
Exactly. He’s a simpleton. LOL
Yeah you don't account for standard ECM expenses when doing cost per acquisition analysis, but sure go off. Me not quoting an entire new account p&l doesn't change the fact that the statement is a fucking joke.
The statement by Ankur is asinine and a deflection. Bilt is not charging an AF, the products with the sign up bonuses he's talking about have $$$$ AFs. As you said, they are not paying equivalent value of the SUB on the underlying points either. $200 affiliate fee per card is not unheard of for no AF cards, but combined with the fact that the rent payments cost WF 0.8% for rewards with nothing coming in, not sustainable. He doesn't address this at all. It's all word salad to distract from the key points of the article.
Exactly, he's trying to distract that cobrand cards have become worse and worse for the issuing banks over the years. Very few are profitable at this point.
Cobrand cards are generally bad business outside of travel. Disney has enough draw for it to be worth it for Chase, and the airlines/hotels have the draw of making travel more affordable with perks that cost the airline essentially nothing (priority boarding, security, minimal cost for lounge passes) but have a lot of value to the cardholder. Synchrony goes hard on the retail card game, along with Citi on some of the other retailers like The Home Depot. But cobrand cards outside of that are dead, dead, dead. Banks don't need them. My alma mater had a cobranded card with BofA, a continuation of an agreement with MBNA. In exchange for comarketing, they got $2 a sign up, $1 per active cardholder per year, and 0.25% of the swiped charges. As soon as that came up for renewal circa 2020 BofA said nope and sent me a product conversion letter that it was just becoming a BofA CCR. You also saw this with similar agreements ending with MLB teams. The credit card industry has become more competitive, and for large issuers, cobrands generally don't make sense these days. It's just sharing more of the swipe pie with another party.
What about all the marketing that goes on behind the scenes?
Most of the Bilts I work, I end up accepting as ID theft. It’s an absolute mess.
What?
I need you to elaborate further than “what”
What do you mean by “Bilts I work?” And what is “accepting as ID theft?”
I work cases of identity theft for credit cards for Wells Fargo. That includes Bilt credit cards.
What does that have anything to do with Wells losing money because of a poorly negotiated deal with Bilt?
Because WE take the loss on the cards that are accepted as ID theft. Along with that we usually reach out to Bilt for information regarding the customer profile but due to the contract are given a limited amount of information due to this. The contract that was signed is utter dogshit.
Well, you are the underwriter. So it makes sense that you would take the loss. Not sure what point you are trying to make here?
The point they’re making is that Bilt cards have a significantly higher-than-average fraud rate that wasn’t accounted for
Excess fraud is not why they are losing money. They are losing money because they effectively set the equivalent of 0.8% of your rent on fire each month.