Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Fintech Card Space is Growing: Brim Financial, Float, Caary Capital, Jeeves, Neo Financial
Global News | | Oct 24, 2021
If you haven’t shopped for a credit card in a while, you may see some unfamiliar names in the offerings.
Companies like Brim Financial, Float Inc., Caary Capital Ltd., Jeeves Inc., and Neo Financial are part of a growing crop of tech-enabled lenders that are looking to snag a share of the lucrative credit card market from the big banks.
The startups have to be creative with rewards programs because they lack the scale to offer the big sign-up bonuses of the big banks, said Castaldo.
See: Any bank, merchant or Fintech on Mastercard’s vast network can soon offer crypto services
On corporate cards, companies like Jeeves, Float and Caary are aiming mostly at startups and small to medium businesses, offering fast sign-up, numerous digital cards, higher credit limits and no personal guarantee, as well as easier integration into some accounting and spend management software.
Jeeves directly monitors a client’s bank account and uses machine learning to assess risk, which Thazhmon said allows them to offer the higher credit limit and no personal guarantee.
The new competition for the big banks comes as the market is already feeling pressure. Credit card debt fell by $16.6 billion in the first year of the pandemic as people paid down debt, especially those with low credit, who generally pay higher interest. Banks are also seeing more competition from buy-now pay-later models, which some companies like Brim have integrated into their products.
But while the new entrants may have innovative offers, they still have a tough road ahead to break into the market, said Abhishek Sinha, who leads EY Canada’s banking technology consulting practice.
See: Canadian Prepaid Payments Industry Increases Financial Services Innovation and Choice
“It’s not that easy breaking into the credit card space because you’ve got a very mature, established market and it seems the Canadian consumer … we are a bit more risk averse, we are a bit more OK with status quo than our cousins down south. I don’t think it’s a question of fintechs picking up on a niche that’s underserved, I think it’s more fintechs picking up on niche where they think they can differentiate.”
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