There are a handful of firms gunning to become leaders in the challenger bank space. There are the usual suspects, like Revolut and N26. But there are others firms that are growing their userbases and assets. One of those companies is CARD. It has 600,000 accounts and $3 billion in customer deposits to date. With some new growth initiatives, CARD claims it is on track to surpass 1.5 million new accounts in 2019.
CARD’s kind of an unbank bank — meaning, the product focus is on branded debit cards, including logos from popular sports teams, athletes, and music groups.
CARD CEO Tim Coltrell joins us to talk about how he’s doubling his account base year over year and what he’s doing to evolve into a competitive challenger bank brand. We discuss Card’s product pipeline and how the company acquires new customers.
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The following excerpts were edited for clarity.
Giving mobile banking a personality
CARD was founded with the idea of bringing mobile banking to consumers and adding a feature that stands out in the marketplace -- with a branded affinity on the card. If you go to CARD.com you will see thousands of different images you can have on your card. In the payments space, the card is a physical manifestation of the product. We’ve gone out and signed up hundreds of different licensors, and have thousands of different images you can put on your card.
The tagline we use is “Pay with personality,” so you can find something on our site that appeals to you personally. So when you bring that card out, it says something about you and your interests. A lot of the time, it initiates conversation between people, and allows you to have a little bit more of a tie into the product than just a standard card that you may get from a traditional bank.
Since we’ve started, we’ve had more than $3 billion in deposits come into our accounts, and a lot of that growth has been in the last couple of years. We have started ramping up marketing in the last couple of years. We raised some capital in the middle of 2017 that allowed us to really start to rebuild our marketing capability, and I think from the first month we marketed to now, we probably increased our monthly volume by five, so we’re generating over 150,000 new signups a month right now for our product.
We have plans to expand substantially from here and grow beyond the core product we have today. On top of our core product, a mobile-first bank account, we have some products in development to expand the product offering set, and leverage the portfolio of affinities we have to provide more products to consumers. My goal is to have a product that we can give to every consumer that comes to our site: from gift cards and prepaid, to bank accounts and credit cards.
Start-ups give way to creative approaches to marketing financial services
After graduate school, I ended up working for one of the major banks in the credit card industry. The beginning of my career was working for a variety of different large bank institutions. I always felt like financial services was one of the great parts of the industry that was overlooked by a lot of folks, and when the opportunity came my way to be part of a startup company in the financial services area, I jumped on that and have been in startups since then.
What’s really exciting about working in the startup environment is the ability to create something new and different, bring it to market quickly, and see the market respond to it. We also get out of the mold of the large banking institutions and how they approach the market. We get to do creative things, like we’ve done to the card by placing imagery on plastic.
Affinity partners help in customer acquisition and company growth
We work with affinity partners to get the acquisition funnel to include their customer bases. A lot of these affinities have their own followings and we work with them to present our product to that group of people. In addition to that, we do our own marketing with various affinities.
We use a variety of channels to reach consumers. But the beauty of it is that each affinity attracts a different demographic, and we can reach across the age spectrum with some of our nostalgic brands, as well as brands that appeal to millennials. When we look at our portfolio, we can see performance that’s different based on what affinity people select, and that’s pretty exciting. It’s an additional layer of data that we get about consumers that no one else has.
Being the player behind these affinity brands
CARD itself hasn’t done a lot of outreach in the market, and we’re just starting to do that. I think you’ll see more brand awareness about CARD itself. We have one of the best domains in the industry, and it represents what people see when they have a payment card in their pocket. While we’ve been primarily marketing the brand of our partners first, we’re doing more now to call out the features we offer. Our features are on-par or better than any of the products in the marketplace, and I think that extra feature of the branded card is a good differentiator from the types of features you hear about in the challenger banks space.
We have this great card that catches people’s attention, but they don’t know enough about the features of the product itself: early direct deposits, the ability to load cash, and the ability to upload a check to your account. Many of the features we have in the industry are often taken for granted, and I see a lot of our competitors doing a great job at calling them out. But consumers may not be aware that those features exist. One of our core strategies now is to balance out the imagery on the card as a key feature, along with the other features of the product that let them do the transactional things that they need to do.
Expanding channels and customer acquisition through the digital spectrum
We’ve been a lot more B2C in our marketing, primarily doing the marketing to the consumer of the affinity, with some additional volume coming in from our brand partners. The success that we’ve found is the ability ourselves to find the market that has an interest in the particular affinity, and then be able to show that product to consumers when it is the right time.
Some of the brands really lend themselves to that, like the NFL Player’s Association. We can target on Facebook around certain geographic areas with the players that would be popular in that area. For instance, you’re in Boston and scanning your Facebook timeline, and suddenly you see a Tom Brady ad right after he wins the Super Bowl. It allows us to succeed when other people don’t have that differentiator to use in that channel.
Facebook has been one of our lead channels for a while, but over the last year and a half, we’ve been expanding channels throughout the digital spectrum -- Google Ads, the affiliate channels -- really anywhere you would expect a digital-first marketing company to be. We’re in those channels with plans to expand beyond that.
My background includes startups in a similar industry in the past, and there are channels we know that work for us and for other people that we’re not currently in. Direct Mail is a good example, where if you target correctly, you’ll find the right consumers that are interested in these products, and that’s a channel that we’ll be exploring in the next six months or so.
Where product is headed
One of the things that I saw as an opportunity when I came to CARD was the chance to offer more products with the same imagery that we have. In our product pipeline, we have gift cards and a full account, including a savings feature. Beyond that, we’re planning on credit cards in the next nine months or so. The idea is if a consumer comes to our site and they find an image they love on our cards, we’ll also have a product that fits the financial stage of their life.
Maintaining differentiation going forward
The innovation that’s coming from the new players in this space is primarily around presentation of the product to the consumer -- the innovation in the way the product is presented, and more aggressiveness around the pricing. The features underlying the products are available in the big banks, as well. It’s more about keeping up with feature parity of other folks, and then having something that differentiates you in the marketplace.
For us, the affinity is the thing that does that, as well as having a great acquisition process to present our product to the consumer. The reason that those two things -- presentation of the product and lower pricing -- are enough in our industry is that it is such a big industry. In banking, I think the debit volume for a year ago was either $2 trillion or $3 trillion, and either way that is a big number.
For companies like us and others in this space, we only have to capture a small percentage of that. In this transition to and opening of neobanks that are making headway and gaining traction, it’s going to be a long path to acquiring a substantial portion of the marketplace. I still view us being in the early stages of that transition to alternative banks instead of traditional banks.
CARD’s goal for 2019? Growth.
The biggest goal is continuing to grow the business. We’ve done remarkably well in the last couple of years, and we have to continue to expand our marketing capability in getting our product in front of more people. That includes gaining access to the way we market, getting new products out in the market that allow us to meet the needs of consumers that don’t necessarily need products we have today, and just optimizing the channels that we’re in. Some of that is going into more traditional media, or traditional marketing channels -- Direct Mail, television -- and I’m really excited for that as our product does really well because of the visual nature of it.
When people hear CARD.com, it is very easy to remember. But when people visit the site, they’re going to see images, one of which is going to appeal to them, and we’re not just happy to try and sell features. We have all of the features and we’ll make sure we point those out, but that visual component where they say, “gosh, that is a really cool card,” is really powerful. I’ve had that happen to me several times while using my cards. That is the feeling we want people to have when they see an ad from CARD.com.