It was a good idea at the time. No issuer made a meaningful play to create a co-brand in the rental industry. With almost 50 million households renting their homes, couldn’t a top issuer come up with a program that rewards all parties to create a leading co-brand franchise? With top issuers offering cobranded cards in partnership with airlines, retailers, and other entities, there is evidence that these alignments are effective, fueling the majority of credit card offerings in the United States.
The answer, so far, is no. Javelin Card Bench, a competitive intelligence tool for top credit card issuers, observed that Wells Fargo officially pulled back the Bilt application site. Card Bench identified this shift within hours of the change.
The Bilt/Wells Fargo relationship has been floundering almost from the beginning. It made a big splash, with a promising pipeline, but cardholders outsmarted the marketers. Savvy cardholders did not revolve as expected (though who would want customers who do not settle their rent monthly), and they rarely used the card for substantial purchases beyond the credit card link. The WSJ conducted a deep dive on the downfall of the card more than a year ago, which can be found here. A snippet of the Javelin Card Bench Flash Report appears below.
Lose One, Gain One
One of Javelin Card Bench’s reporting functions is the Flash Report. Users can receive journalized daily change updates or cluster them over a few days, as illustrated in this example. Here we see the Wells termination and a new launch by Capital One on their T-Mobile Visa card. In contrast to the Bilt relationship, we believe Capital One can be a winner if it provides value to its mobile base, which includes approximately 130 million people. Capital One, now with Discover as the top U.S. card issuer, is no novice to credit cards and has deep experience with running cobrands. However, that is a story for another day.
Watch for Bilt 2.0
Bilt continues to be a strong business on its own, but has a new suitor for its cobrand, named Cardless. This will be interesting to watch. Cardless is not a top issuer like Capital One, Discover, or Wells Fargo. They issue cards through First Electronic Bank, based in Salt Lake City. Cardless offers an embedded card platform and has a few interesting clients.
And, the world can use another stab at linking renters to credit cards. Although the margins are tight, there are plenty of them. As we say in credit card payments, you can always make up the margins with volume.
