CARD, a prepaid card startup, wants to build a banking platform off affinity marketing

Personalized debit cards from Card.com

Most banks approach personalization solely through the lens of digital experience. To CARD.com, however, personalization actually refers to the look and feel of its debit card.

Card’s website presents the offering as an attempt to make banking fun (“CARD.com treats you as an individual who is cool like James Dean,” the website states). Customers can order debit cards with images of their favorite sports players or movie stars (for example, Marilyn Monroe), along with nature, art and other themed categories. The prepaid cards are offered in partnership with The Bancorp Bank.

According to Card, a VC-backed startup founded in 2012 that so far has raised $18.6 million, affinity with a personalized image is a major customer acquisition driver. The company claims it has signed up more than 600,000 new accounts to date and is on track to surpass 1.5 million new accounts in 2019. That’s a sizable customer customer number, but whether affinity with a popular personality tied to a debit card will result in sustained customer growth still is an open question, analysts say.

CEO Tim Coltrell said Card plans to evolve the prepaid card product to include direct-deposit capabilities and other feature releases like gift cards, overdrafts and a credit builder for customers with a lack of credit history or bad credit. The account currently allows getting paychecks two days early, a fee-free ATM network and fee-free cash back at merchant checkouts. Customers need to maintain a $1,000 balance to get a $9.95 monthly fee waived, but Coltrell said the direct deposit account that will launch in a few months will eliminate the monthly fee altogether.

“The idea is, if people love the images, can we have a product that fits their need?” Cottrell said. The company currently is at break-even status and generates revenue from interchange (debit card swipe fees charged to merchants) and fees. Its marketing mix includes search and paid social media posts, with an emphasis on Facebook as a channel.

Whether or not the product will stick ultimately will depend on user experience. “Right now, they’ve got an existing customer base and [future success] will depend on how they can leverage that,” said Alyson Clarke, principal analyst at Forrester. “You have to add value to customers beyond just a debit card; companies like Chime and Monzo are helping people improve their financial positions.”

Should Card be able to capitalize on customer growth and additional revenue streams, it may have a good foundation for a viable business model, according to Tony DeSanctis, senior director at Cornerstone Advisors. “GreenDot basically has done the same thing,” he said in an email to Bank Innovation.”They have leveraged the prepaid product into a ‘checking’-like solution and are currently the ‘bank’ behind Walmart and Apple Cash. It actually is not a bad model if you can get the scale where you need it to be.”